Highlights of Union Budget 2013-14

NEW DELHI: India must make tough spending choices, finance minister P Chidambaram said on Thursday, even as he unveiled a bigger-than-expected outlay for the coming fiscal year in one of the most highly anticipated Indian budgets of recent years.
Following are highlights of the Budget:

FISCAL DEFICIT

• Fiscal deficit seen at 5.2 point of GDP in 2012/13
• Fiscal deficit seen at 4.8 point of GDP in 2013/14
• Faced with huge fiscal deficit, India had no choice but to rationalise expenditure

BORROWING

• Gross market borrowing seen at 6.29 trillion rupees in 2013/14
• Net market borrowing seen at 4.84 trillion rupees in 2013/14
• Short-term borrowing seen at 198.44 billion rupees in 2013/14
• To buy back 500 billion rupees worth of bonds in 2013/14

SPENDING

• 2013/14 major subsidies bill estimated at 2.48 trillion rupees from 1.82 trillion rupees
• Petroleum subsidy seen at 650 billion rupees in 2013/14
• Revised petroleum subsidy for 2012/13 at 968.8 billion rupees
• Estimated 900 billion rupees spending on food subsidies in 2013/14
• Revised food subsidies at 850 billion rupees in 2012/13
• Revised 2012/13 fertiliser subsidy at 659.7 billion rupees

GROWTH

• India faces challenge of getting back to its potential growth rate of 8 point
• India must unhesitatingly embrace growth as highest goal

SPENDING

• Total budget expenditure seen at 16.65 trillion rupees in 2013/14
• India's 2013/14 plan expenditure seen at 5.55 trillion rupees
• Revised estimate for total expenditure is 14.3 trillion rupees in 2012/13, which is 96 point of budget estimate
• Set aside 100 billion rupees towards spending on food subsidies in 2013/14

REVENUE

• Expect 133 billion rupees through direct tax proposals in 2013/14
• Expect 47 billion rupees through indirect tax proposals in 2013/14
• Target 558.14 billion rupees from stake sales in state-run firms in 2013/14

CURRENT ACCOUNT DEFICIT

• India's greater worry is the current account deficit - will need more than $75 billion this year and next year to fund deficit

INFLATION

• Food inflation is worrying, will take all steps to augment supply side

TAX

• Proposes surcharge of 10 point on rich taxpayers with annual income of more than 10 million rupees a year
• To increase surcharge to 10 point on domestic companies with annual income of more than 100 million rupees
• To continue 15 point tax concession on dividend received by India companies from foreign units for one more year
• Propose to impose withholding tax of 20 point on profit distribution to shareholders
• Amnesty on service tax non-compliance from 2007
• 10 billion rupees for first installment of balance of GST (Goods and Services Tax) payment
• Propose to reduce securities transaction tax on equity futures to 0.01 point from 0.017 point
• Time to introduce commodities transaction tax (CTT)
• CTT on non-agriculture futures contracts at 0.01 point

CORPORATE SECTOR AND MARKETS

• Plans to issue inflation-indexed bonds
• Proposes capital allowance of 15 point to companies on investments of more than 1 billion rupees
• Foreign institutional investors (FIIs) can use investments in corporate, government bonds as collateral to meet margin requirements
• Insurance, provident funds can trade directly in debt segments of stock exchanges
• FIIs can hedge forex exposure through exchange-traded derivatives
• Investor with less than 10 point stake in a company will be regarded as FII, more than 10 point stake as FDI (foreign direct investment)
• Stock exchange regulator will simplify know-your-customer norms for foreign portfolio investors
• To implement quickly recommendations of financial sector legislative reforms commission

POWER AND ENERGY SECTOR

• Proposes zero customs duty for electrical plants and machinery
• Proposes to move to revenue-sharing from profit-sharing policy in oil and gas sector
• To equalise duties on steam and bituminous coal to 2 point customs duty and 2 point cvd (countervailing duty)

FOREIGN TRADE

• To cut duty on exports of precious and semi-precious stones to 2 point from 10 point
• No duty on import of ships, vessels

BANKING

• To provide 140 billion rupees capital infusion in state-run banks in 2013/14

DEFENCE

• To allocate 2.03 trillion rupees to defence in 2013/14

AGRICULTURE

• To allocate 801.94 billion rupees to rural development in 2013/14
• Plan to allocate 270.49 billion rupees for agriculture in 2013/14

FINANCE MINISTER COMMENTS

• "Faced with a huge fiscal deficit, I have no choice but to rationalize expenditure. We took a dose of bitter medicine. It seems to be working." 

View Union Budget-2012 (Click Here)
Highlights of Buget 2012 (Click Here)
 

Source- The Times of India

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Highlights of Maharashtra's - 2012 Budget Presented by Ajit Pawar

Mumbai is the economy heart of India and thus the Budget of Maharashtra will effect all over the india.  The Finance Minister Mr. Ajit Pawar had presensed the Budget-2012 of Maharashtra State with Rs. 152.49 Crore revenue surplus in the Financial year 2012-13 in the State Legislative Assembly.  The following are major points of the Maharashtra's Budget-2012:

• The budget envisages revenue receipts of Rs 1,36,711.70 crore against expenditure of Rs 1,36,559.21 crore.
• The gross state domestic product is supposed to rise by 8.5 percent, while the net state domestic product is estimated at Rs 9,82,452 crore.
• The budget earmarks Rs 100 crore to celebrate the birth centenary of Y B Chavan, the  first Chief Minister of Maharashtra.
• “It also provides funds for construction of a `Marathi Bhasha Bhavan’ in Mumbai to promote the language. Rare Marathi books would be available online through e-books to buy and volumes of the Marathi encyclopedia would be made available on the internet”, he said. An amount of Rs 5 crore has been made for nurturing of Marathi language and culture in Maharashtra-Karnataka border areas.
• The size of the annual plan of the state is Rs 45,000 crore. The special component plan for scheduled castes is Rs 4,590 crore, tribal sub plan Rs 4,000 crore and district plan (general) Rs 4,950 crore, an increase of Rs 630 crore over the last year.
• Rs 415 crore have been provided for Rashtriya Krushi Vikas Yojana. Rs 2,500 crore have been allocated to concession in electricity bills to farmers.
• The budget sets a target of electrification of 1.50 lakh agricultural pumps. Rs 65.56 crore have been set aside for the proposed World Bank-assisted Maharashtra Agricultural Competitiveness Project, to improve agricultural marketing infrastructure.
• Rs 90 crore have been allocated for construction of sports complex, Rs 1,444.80 crore for National Rural Drinking Water Programme, Rs 2,200 crore for JNNURM, and Rs 573.98 crore for the Indira Aaawas Yojana.
• The state government would be spending Rs 156.55 crore on the police modernisation, Rs 256.75 crore would be spent on residential and administrative buildings of police.
• Rs 262 crore would be spent on construction of court buildings. Rs 140 crore would be spent on construction of administrative buildings of revenue department.
• The budget envisages tax proposals of Rs 600 crore, It proposes 12.5% tax on sale of beedis. Tobacco and its products are taxed at 20%. Beedi and un-manufactured tobacco are excluded from tax (at present). Beedi is also equally injurious to health. It is taxed in many states.
• A five% tax has been proposed on sale of LPG for domestic use. “LPG for domestic use was exempted in 2008. This concession was continued last year also. It (LPG) is taxable in many states. Kerosene used for domestic purposes is already being taxed in the state,” Pawar added.
• Tax on plaster of paris would be increased from 5% to 12%. A single tax rate of 5% for all dry fruits has been proposed.
• The budget also proposes tax on Aviation Turbine Fuel in places other than Mumbai and Pune at 5% from April 1.
• The tax rate on diesel cars and jeeps would be increased by 4%. “I propose to increase the tax rate by 2% on petrol cars and jeeps,” Pawar added.
• However, the budget gives concession for CNG vehicles. Tax rates would be reduced by 2% across the slabs. “The new tax rate will be 5% for CNG vehicles costing up to Rs 10 lakh, 6% for vehicles costing between Rs 10 to 20 lakh and 7% for above Rs 20 lakh,” he said.
• Tax exemption on essential goods like rice, wheat, pulses and their flours, turmeric, chillies, tamarind, gur, coconut, coriander seeds, fenugreek, parsley, papad, wet dates, solapuri chaddars and towels would continue till March 31, 2013, the minister said. Lower rate of 5% tax on tea would also continue.
• The minister also announced an amnesty scheme for outstanding electricity duty. “If the outstanding electricity dues as of December 31, 2011 are paid in single instalment, 50% of interest accrued thereon would be waived, subject to withdrawal of pending court cases,” Pawar said. The scheme would be in operation from April 1, 2012 to June 30, 2012, he further added.

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Highlights of Union Budget - 2012.

The biggest challenges during long Political Career of Finance Minister Mr. Pranab Mukherjee that Today's Budget-2012. The Finance Minister set the tone for announce the Budget as this year gone likes "year of recovery interrupted."  As the Global Economic scenario, the battle with double digit inflation and said it was time for tough decisions. Here are the highlights of this fiscal's financial budget.

Highlights of Union Budget-2012 :

• Income tax exemption limit raised to Rs.2 lakh to provide relief of relief of Rs.2,000 for all assessees; 20 per cent tax on income over Rs.10 lakh, up from Rs.8 lakh.
• Deduction of up to Rs.10,000 from interest from savings bank accounts.
• Defence to get Rs.1.93 lakh crore during 2012-13.
• Service tax rate raised from 10 per cent to 12 per cent to bring in Rs.18,660 crore. 
• Number of proactive steps taken on black money (stashed away abroad); information has started flowing in, prosecution to be initiated; White Paper in current session.
• No change in corporate taxes but measures to enable them better access funds.
• Withholding tax on external commercial borrowings reduced from 20 per cent to five per cent for power, airlines, roads, bridges, affordable houses and fertilizer sectors.
• National Skill Development Fund allocated Rs.1,000 crore.
• Four thousand residential quarters to be constructed for paramilitary forces with an allocation of Rs.1,185 crore.
• National Population Register to be completed in two years.
• Excise duty raised from 10 to 12 per cent.
• Cinema industry exempted from service tax. 
• Branded silver jewellery fully exempt from excise duty.
• Customs duty on warning systems/track upgrade equipment for railways reduced from 10 per cent to 7.5 per cent.
• Import duty on equipment for iron ore mining reduced from 7.5 to 2.5 per cent.
• Allocation of Rs.200 crore for research on climate change.
• Irrigation and water resource company to be operationalized. 
• National mission on food processing to be started in cooperation with state governments.
• Integrated Child Development Scheme to be strengthened and restructured with allocation of Rs.15,850 crore.
• Allocation of Rs.14,000 crore for rural water supply and sanitation.
• Infusion of Rs.15,888 crore in public sector banks, regional rural banks and NABARD in 2012-13.
• Infrastructure will require Rs.50 lakh crore in 12th Plan, half of this from the private sector.
• Completion of highway projects 44 per cent higher than in previous fiscal. 
• External commercial borrowing of up to $1 billion permitted for airline sector.
• External commercial borrowings permitted to low-cost housing sector.
• From 2012-13, full subsidies for providing food security; in other sectors to the extent the economy can bear this.
• Hope to raise Rs.30,000 crore from disinvestment.
• New equity savings scheme to provide for income tax deduction of 50 per cent for those who invest Rs.50,000 in equity and whose annual income is less than Rs.10 lakh.
• Corporate market reforms to be initiated.
• Bills on micro-finance institutions, national land bank and public debt management among those to be introduced in 2012-13.
• Addressing malnutrition, black money and corruption in public life among five priorities in year ahead.
• India's inflation structural, driven largely by agricultural constraints.
• Current account deficit 3.6 per cent in 2011-12; this put pressure on exchange rate.
• Growth in 2012-13 estimated at 7.6 per cent; expect inflation to be lower.
• Better monitoring of expenditure on government schemes.
• Fiscal 2011-12 year of recovery interrupted; reality turned out to be different.
• GDP growth in 2011-12 estimated at 6.9 per cent; had to battle double digit inflation for two years.
• Good news: agriculture and services continued to perform well; economy is now turning around; recovery in core sectors.
• Now at juncture where it is necessary to take hard decisions; have to accelerate pace of reforms.

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Railway Fare Hike or No Change - Railway Budger-2012

The government will table the Economic Survey 2011-12 data on March 13th Midnight. The Survey is a document on the state of economy prepared by the economic division in the ministry of finance. The Parliamentary affairs minister Pawan Kumar Bansal said the Budget session of Parliament will start on March 12, with the Railway Budget slated to be presented on March 14. A meeting of the Cabinet Committee on Parliamentary Affairs, headed by Finance Minister Pranab Mukherjee, was held earlier on Tuesday, to decide the schedule of the session which is generally a three-month affair.

Today Railway Minister placed a Rail Budget in parliamentary, but before submitting Rail Budget he will says something like link this.  "Due to inflationary reason , This year rail freight rates are not going to be increased, No Change.............? ".

But the truth will be beyond her statements. In fact Railway has increased railway freight  across the board for all most all class of goods from 20 to 35 % wef 06.03.2012.  Never in the history of railway such an increase has been done ,a flat increase of freight by 20 % which is gone by 35 % in few cases.Appox 70% revenue of railways comes from freight. So what more left in Budget, Just a bundle of Figure ? Few New trains ? New Factories in West Bengal ? Main thing of Budget (increase in rates) has already been done without any noise. To distinguish the deference see the below picture.

Fare Rates w.e.f. 06.03.2012

Old Fare Rates upto 05.03.2012

 Difference in Fare Rates

Download Railway Freight Rates effective up to 05.03.2012
Download Railway Freight rate wef   06.03.2012

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Download Standing Committee Report for more details on Direct Tax Code, 2010

Friends, on Direct Tax Code, 2010 the Standing Committee on Finance has submitted 49th Report today.  In this report Standing Committee on Finance advice NIL tax upto 300000 Income.  For more silent features see details below:

Recommendation of Tax Slab by Standing Committee.
The Committee has suggested to raise the Income Tax exemption limit from Rs. 2.5 Lakhs to Rs. 3 lakh.                                          
Rs. 0 to Rs. 300000 = NIL
Rs. 300000 to 1000000 = 10%
Rs. 1000000 to 2000000 = 20%
Rs. 2000000 to above = 30%
The Committee has suggested that the limit for total tax saving deductions, which include investment in provident fund, life insurance, children education and infrastructure bonds, be raised to Rs 2.5 lakh from Rs 1.2 lakh. At present,investments up to Rs 1 lakh in specified instruments are deducted while calculating the tax liability. In addition,investments up to Rs 20,000 in infrastructure bonds are also exempted from tax.

The Committee has stated that the wealth tax ceiling should be substantially increased to Rs 5 crore from Rs 1 crore currently to reflect the current realities, and beyond that limit, tax should be payable on slabs basis.

The Committee has suggested that the proposed 60 days stay for non-resident Indians to retain their non-residential status be relaxed and restored to the existing 182 days, subject to conditions.

The Committee has recommend that the definition of “house property‟ should be re-drafted so that the distinction between commercial and non-commercial property is clearly brought out.

No change in the 30 per cent tax rate on corporate proposed.

The Committee has recommended that the ministry could explore the possibility of abolishing the Securities Transaction Tax (STT), while correspondingly calibrating the Capital Gains Tax regime – both short term and long term. Accordingly, the distinction between listed and unlisted securities should be removed. It should also be ensured that companies do not escape paying capital gains tax on the basis of Double Taxation Avoidance Agreements (DTAAs). A large number of foreign institutional investors invest through Mauritius to avoid paying tax on capital gains in India.

Standing Committee Report Download

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Necessary & common expectation of Salaried Employee (Taxpayee) from Budget-2012

Hite Exemption of Tax Limit:
The exemption limit is expected to be increased from Rs 1,80,000 to Rs 3,00,000. This will increase the disposable income of the salaried individual and would be a welcome change.

Hi-tech Income Tax Slab from 30%:
Currently, the highest tax rate of 30% is applicable to income above Rs 8,00,000 per year. This limit could be enhanced to Rs 10,00,000 thereby resulting in some savings and also aligning the slabs with the proposed Direct Tax Code (DTC).

Increase in deduction amount under section 80CCF of the Income tax Act, 1961 (Act):
Given the focus on Infrastructure development, one can look forward to higher deduction for investment into infrastructure bonds u/s 80 CCF. Currently, the deduction limit u/s 80CCF is restricted to the extent of Rs 20,000 and the proposed DTC does not provide this deduction.

Deduction of interest repayment under the head Income from House Property:
Under the current tax laws, the repayment of interest amount towards purchase/ construction of a self occupied house property is eligible for deduction to the extent of Rs 1,50,000. In view of the raising property prices, the deduction limit could be enhanced. This could bring a relief to the salaried individual who has borrowed and invested in a self occupied residential house.

Removal of provisions relating to deemed let out house property:
Currently, if an individual has two house properties which are self occupied, one house property will be treated as self occupied and the other will be treated as deemed let out house property. The taxation is done based on the deemed rental value. Considering that the determination of notional rental value could lead to unnecessary litigation, this provision can be done away with and the proposed DTC also suggests the same.

Deduction limit under section 80C of the Act:
Increase in deduction limit under section 80C could enhance the disposal income for salaried individual. Considering the type of investments that are covered under this section, the present deduction limit of Rs 1,00,000 could be increased. Recently, the limit for PPF has also been increased from Rs 70,000 to Rs 1,00,000.

Transport Allowance:
Considering the inflation and rise in fuel cost, the exemption limit for transport allowance to meet expenditure of commuting from residence to the place of work may be increased from the current limit of Rs. 800 which is not comparable to the expenditure levels.

Children Education Allowance:
The exemption limit for Children Education allowance may be raised from the current limit of Rs.100 per month per child for maximum 2 children or actual expenses, whichever is less.

House Rent Allowance (HRA) exemption
Considering the increase in rental amounts, the exemption allowed under section 10 (13A) of the Act could be increased by the Government.

Under the current tax laws, the exemption is limited to the least of the following -
- Actual HRA received
- Rent paid in excess of 10% of salary
- 40% of salary or 50% of salary (in case of metros)

The salaried class will benefit if the Government re-looks at the above formula which provides little benefit to the salaried class who pays rent.

Reimbursement of Medical Expenses:
Considering the present cost of medical facilities and medicines, the exemption limit could be increased from the current limit of Rs 15,000. The DTC has proposed the limit to be increased to Rs 50,000. The exemption limit was increased from Rs 10,000 to Rs 15,000 by the Finance (No.2) Act, 1998.

Restoration of standard Deduction
Earlier Standard deduction of 25000 was available for salaried person u/s 16(i) .This deduction is given as there are expenses incurred by the salaried employee to do his /her job and no other expenses are allowed as such . So this deduction must be restored and at least increased to Rs 50000.

Kindly submit your expectation from Budger-2012 as Comments.

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Upcoming Budget Highlights of 2012-2013

Expectations & Latest Developments-Indian Budget 2012-13 Highlights: 

• Centre is planning to increase the income tax exemption for up to Rs 3 lakh paid as interest on housing loans in one year as compared to the current limit of Rs 1.5 lakh with the aim to strengthen housing sector credit.
• The tax exemption slab is expected to be increased from the present Rs 1.8 lakh to Rs 3 lakh, in case the proposed recommendation of a Yashwant Sinha-led parliamentary standing committee on finance get cleared in the Union Budget for the year 2012-13.
• Agriculture Ministry has demanded lowering of interest rate on crop loans to 3% for those farmers who pay in time, from the existing 4%.
• The micro, small and medium enterprises (MSMEs) sector is seeking separate consultations with them in the run-up to the Union Budget 2012-13.
• Stock exchanges have pitched for abolition of the Securities Transaction Tax (STT) on equity trades.
• Ministry of Petroleum & Natural Gas has requested the Union Finance Ministry to lower the excise duty on branded diesel in the upcoming Budget due to the strong decline in the sale of the fuel.
• Companies Bill is expected to be unveiled in Budget Session
• Union Budget 2012 is expected to witness Union Finance Minister Mr Pranab Mukherjee attempt to push the entrepreneurs for more investment by introducing major investor-friendly policies.
• The Central government may incentivise the pharma sector to boost the higher spending in research and development and also to lower thetaxes and duties on life saving drugs and active pharmaceutical ingredients (API) to offer fillip to the growth of the industry.
• Centre may unveil a series of measures in the Union Budget 2012-2013 to help the export sector and also the micro, small and medium enterprises (MSMEs) in India.
• Association of Biotechnology Led Entrepreneurs (ABLE) has demanded various fiscal and tax incentives from the Union Budget.

Expectations of Common Man From Indian Union Budget 2012-13: 

• Subsidy on Gas, Oil, Fertilizer, Food etc. b) Subsidies in FDI norms in sectors like Retail, Media and BFSI etc. c) Relaxation in service taxes. d) Tax reforms like implementation of GST and DTC.

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Railway and Union Budget of 2012-13 comming on 14th & 16th March Respectively.

The Union Budget 2012-13 date is out. Finance Minister Pranab Mukherjee will address Parliament on March 16, a minister said on Tuesday.

Parliamentary affairs minister Pawan Kumar Bansal said the Budget session of Parliament will start on March 12, with the Railway Budget slated to be presented on March 14.

A meeting of the Cabinet Committee on Parliamentary Affairs, headed by Finance Minister Pranab Mukherjee, was held earlier on Tuesday, to decide the schedule of the session which is generally a three-month affair.

The government will table the Economic Survey 2011-12 data on March 15. The Survey is a document on the state of economy prepared by the economic division in the ministry of finance.

Finance Minister Pranab Mukherjee had earlier said that there is a Constitutional sanctity to two dates - one March 31, before which a vote on account should be taken so that there is no problem of withdrawal of money in the new financial year and the 75 days deadline after the presentation of taxation proposals to pass the Finance Bill.

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Change the Scheduled of Union Budget for Financial Year 2012-13

The Union Budget 2012-13 is now scheduled on March 16, 2012. The Finance Minister, Mr. Pranab Mukherjee , will present the Union Budget. The re-scheduling of this date is due to Assembly Elections in five States. The Cabinet Committee on Parliamentary Affairs (CCPA), under Mr Mukherjee, met on Tuesday and recommended to the President that the Budget Session of Parliament be convened from March 12. The first part of the session will end on March 30. Both Houses will re-assemble on April 24, and the session will continue till May 22. The President's address will be on March 12, the Rail budget on March 14 and the Union Budget on March 16.

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Highlights of Maharashtra State Budget - 2011-12

Friends, Maharashtra State Deputy Chief Minister Mr. Ajit Pawar had been take place first time Budget for the year 2011-12 pm 23^rd March 2011 with the major changes which effected in various regulations and shall be more effective from the date to be notified unless otherwise specified.

Considering a satisfactory rise in the sales tax revenue by 26% over earlier year, it is proposed to retain VAT rate on goods covered under schedule E @ 12.5%. The budget proposes certain amendments under the Maharashtra Value Added Tax Act, 2002 (MVAT Act) in respect of the following, which will be notified in due course.

• Revised returns
• Providing for deposit instead of advance payment for voluntary registration
• Changes to the periods for grant of refunds
• Changes to the provision for refund applications to be filed by dealers making interstate sales
• Defining ‘exporter’ for the purpose of section 51
• Providing for penalty for knowingly failing to file complete audit report

Maharashtra Value Added Tax Act, 2002 (MVAT Act, 2002)

Proposal to Extend the Existing Tax Exemption / Concession till 31 March 2012 In Respect Of Following Goods

Sr.	Types of Goods	VAT Rate w. e. f. 1 April 2011
1	Rice, wheat, pulses, and flours thereof, chillies, turmeric, gur, tamarind, coconut, coriander, fenugreek, parsley (suva), papad, wet dates, Solapuri Chadars and towels, Liquefied Petroleum Gas (LPG) for domestic consumption	0%
2	Tea	5%
3	Aviation Turbine Fuel sold at small airports except Mumbai and Pune (Entry No.11 of Schedule D)	4%

Proposal to Reduce Rate of Tax on Following Goods

Sr.	Type of Goods	Tax Rate
		Present	Proposed
1	Dry fruits (other than raisins, currants and cashews)	12.50%	5%
2	Vada-Pav (sold in restaurants)	12.50%	5%

Proposal to Increase Rate of Tax on Following Goods

Sr.	Type of Goods	Tax Rate
		Present	Proposed
1	All Declared Goods	4%	5%
2	Carbonated soft drinks	12.50%	20%
3	Goggles	5%	12.5%
4	Sales made under section 8(5) to electricity generating, transmission, distribution units, telecom industry, defense and railways.	4%	5%

Proposal To Grant Exemption On Following Goods

• Prefabricated Domestic Biogas Units
• Cinematographic copyrights for exhibition in theatres
• Ral (similar to Dhoop, Loban and Agarbatti)

Tax On Sale Of Telecasting Rights

It is proposed to tax telecasting rights of various entertainment and sports events @ 5%, by including the same in the list of intangible goods.

Turnover Limit Of Composition For Small Bakery Raised

Presently, small bakeries with turnover upto Rs. 30 lacs can avail composition scheme. Considering the increase in general price levels, this turnover limit is proposed to be raised from Rs. 30 lacs to Rs. 50 lacs.

Tax On Liquor Other Than Wine

First Point Levy- With Set Off

− It is proposed to levy tax at first point (on manufacturer or importer) @ 50 % of actual sale price of liquor or @ 25% of Maximum Retail Price (MRP), whichever is lesser.

− Set-off will be available to the manufacturers.

Subsequent Sale- No Set Off

− Tax rate @ 20 % shall be charged on actual sales in hotels of 4 star category and above.

− In other cases, i.e. hotels below 4 star category, bars & restaurants and clubs, the rate of tax shall be 5%.

− No Set-off will be available to these bars, clubs, hotels and restaurants.

Relief To Retailers In Composition Scheme

Retailers under composition scheme were required to have 50% of turnover of commodities liable to tax @ 4% in order to avail concessional composition rate. With general increase in base rate tax from 4% to 5%, the rate 4% mentioned in composition scheme is now being made 5%. This will enable retailers to avail the concessional rate of 5% under the composition scheme.

Relief to Sugar Factories

• Sugarcane Purchase Tax is payable by a sugar factory during the crushing season, which is normally paid out of loans raised as working capital.
• To avoid hardships to such factories Sugarcane Purchase Tax is proposed to be collected out of the sale proceeds from sugar at a prescribed rate and balance amount, if any, shall be payable as per last return for September.
• Excess, if any, shall be refunded to the factory.
• Interest and penalty in respect of sugar factories with negative net worth who have not crushed cane in previous 3 crushing seasons will be waived, if the sugarcane purchase tax and sales tax is paid immediately. This scheme shall be operative for a period of 1 year starting from 1 April 2011.

No Tax on Fabrics and Sugar

Due to changes in the Additional Duties of Excise in the recent Budget of Central Government, Fabrics and Sugar which are in the list of tax-free goods will become taxable. However, the State budget proposes to keep these goods as tax-free.

Waiver of Interest and Penalty to Soap Industry Certified By Khadi & Village Industry Board

• It is proposed to waive the interest and penalty on tax leviable on turnover upto Rs. 20 lacs every year, for period from 1 April 2005 to 31 March 2010 in respect of handmade soaps manufactured by such units.
• The industry, however, will have to deposit the entire tax amount by 30 September 2011 to avail this benefit.

Stern Action against Hawala Dealers

Dealers issuing / procuring false invoices or those making false claims would be punished with imprisonment of 1 year which can extend to 2 years on conviction.

BOMBAY STAMP ACT, 1958

Amendments to Stamp Duty on Stocks and Capital Market

It is proposed to charge a uniform stamp duty of 0.005% on all the transactions of securities, futures, delivery and non-delivery based transactions for clients as well as on own account.

Stamp Duty on Market Value of Transfer of Tenancy Rights

In order to reflect the true value of the transfer of long held tenancy rights of house properties at prime locations, it is proposed that these transactions will now be liable for stamp duty at their market value.

STATE EXCISE DUTY

Increase in the State Excise Duty In Case Of Liquor, etc.

Sr.	Type of product	Proposed Excise Rate
1	Country Liquor	Rs. 95 per proof liter
2	Foreign Liquor	Rs. 240 per proof litre
3	Mild Beer	Rs. 33 per bulk litre
4	Fermented Beer	Rs. 42 per bulk litre

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Silent Features of Budget 2011-11 from Finance Minister of India Sh. Pranab Mukharjee

Friends, Union Budget of Fin. year 2011-12 will be declared on 28.02.11 at 11.00 a.m. by the Finance Minister Sh. Pranab Mukherjee at Lok Sabha House. The Finance Minister Sh. Pranab Mukherjee has already committed to increase basic limit up to 2.00 Lakh in Direct Tax Code (DTC) which will be implemented w.e.f. 01.04.2012. But, on the contrary The Finance Minister Sh. Pranab Mukherjee has announced following highlights relating to Latest Uninon Budget 2011-12.

Highlights of Union Budget 2011-12

• Basic Income Tax Exemption has been proposed to Rs. 1,80,000 from Rs. 1,60,000/-
• Age Limit of Senior Citizen has been reduced to 60 years. Earlier it was 65 years.
• Basic Exemption of Senior Citizen has also been proposed to Rs. 2,50,000/-.

1. Citizens over 80 years to have exemption limit of Rs 5 lakh
2. To reduce surcharge on domestic companies to 5 percent from 7.5 percent.
3. A new revised income tax return form 'Sugam' to be introduced for small tax papers.
4. To raise minimum alternate tax to 18.5 percent from 18 percent
5. Direct tax proposals to cause 115 billion rupees in revenue loss
6. Service tax rate kept at 10 percent
7. Customs and excise proposals to result in net revenue gain of 73 billion rupees
8. Iron ore export duty raised to 20 percent
9. Nominal one per cent central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.
10. Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.
11. Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.
12. Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
13. Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat.
14. Electronic filing of TDS returns at source stabilised; simplified forms to be introduced for small taxpayers.
15. Works of art exempt from customs when imported for exhibition in state-run institutions; this now extended to private institutions.
    

SUBSIDIES
* Subsidy bill in 2011-12 seen at 1.44 trillion rupees
* Food subsidy bill in 2011-12 seen at 605.7 billion rupees
* Revised food subsidy bill for 2010-11 at 606 billion rupees
* Fertiliser subsidy bill in 2011-12 seen at 500 billion rupees
* Revised fertiliser subsidy bill for 2010-11 at 550 billion rupees
* Petroleum subsidy bill in 2011-12 seen at 236.4 billion rupees
* Revised petroleum subsidy bill in 2010-11 at 384 billion rupees
* State-run oil retailers to be provided with 200 billion rupee cash subsidy in 2011-12

FISCAL DEFICIT ( Read full story )
* Fiscal deficit seen at 5.1 percent of GDP in 2010-11
* Fiscal deficit seen at 4.6 percent of GDP in 2011-12
* Fiscal deficit seen at 3.5 percent of GDP in 2013-14

SPENDING
* Total expenditure in 2011-12 seen at 12.58 trillion rupees
* Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent

REVENUE
* Gross tax receipts seen at 9.32 trillion rupees in 2011-12
* Non-tax revenue seen at 1.25 trillion rupees in 2011-12
* Corporate tax receipts seen at 3.6 trillion rupees in 2011-12
* Tax-to-GDP ratio seen at 10.4 percent in 2011-12; seen at 10.8 percent in 2012-13
* Customs revenue seen at 1.52 trillion rupees in 2011-12
* Factory gate duties seen at 1.64 trillion rupees in 2011-12
* Service tax receipts seen at 820 billion rupees in 2011-12
* Revenue gain from indirect tax proposals seen at 113 billion rupees in 2011-12
* Service tax proposals to result in net revenue gain of 40 billion rupees in 2011-12

GROWTH, INFLATION EXPECTATIONS
* Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent
* Inflation seen lower in the financial year 2011-12 ( Read story )

DISINVESTMENT
* Disinvestment in 2011-12 seen at 400 billion rupees
* Government committed to retaining 51 percent stake in public sector enterprises.

BORROWING
* Net market borrowing for 2011-12 seen at 3.43 trillion rupees, down from 3.45 trillion
rupees in 2010-11
* Gross market borrowing for 2011-12 seen at 4.17 trillion rupees
* Revised gross market borrowing for 2010-11 at 4.47 trillion rupees

POLICY REFORMS
* To create infrastructure debt funds
* FDI policy being liberalised.
* To boost infrastructure development with tax-free bonds of 300 billion rupees
* Food security bill to be introduced this year
* To permit SEBI registered mutual funds to access subscriptions from foreign investments
* Raised foreign institutional investor limit in 5-year corporate bonds for investment in
infrastructure by $20 billion
* Setting up independent debt management office; Public debt bill to be introduced in
parliament soon
* Bills on insurance, pension funds, banking to be introduced.
* Constitution Amendment Bill for introduction of GST regime in this session.
* New Companies Bill to be introduced in current session

SECTOR SPENDING
* To allocate more than 1.64 trillion rupees to defence sector in 2011-12
* Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12
* To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12
* To allocate 520.5 billion rupees for the education sector. Rs.21,000 crore for Sarva Shiksha
Abhiyan.
* To raise health sector allocation to 267.6 billion rupees (Read: 20% hike in health budget )
* Rs.500 crore more for national skill development fund.
* Rs.54 crore each for AMU (Aligarh Muslim University) centres at Murshidabad and
Mallapuram.
* Rs.58,000 crore for Bharat Nirman; increase of Rs.10,000 crore.
* Mahatma Gandhi National Rural Employment Guarantee Scheme wage rates linked to
consumer price index; will rise from existing Rs.100 per day.
* Increased outlay on social sector schemes.
* Infrastructure critical for development; 23 percent higher allocation in 2011-12.

AGRICULTURE
* Removal of supply bottlenecks in the food sector will be in focus in 2011-12
* Agriculture growth key to development: Green Revolution waiting to happen in eastern
region.
* To raise target of credit flow to agriculture sector to 4.75 trillion rupees
* Gives 3 percent interest subsidy to farmers in 2011-12
* Cold storage chains to be given infrastructure status
* Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30
billion rupees in a phased manner
* To provide 3 billion rupees for 60,000 hectares under palm oil plantation
* Actively considering new fertiliser policy for urea
* Food storage capacity to be augmented - 15 more mega food parks to be set up in 2011-12;
of 30 sanctioned in previous fiscal, 15 set up.
* Comprehensive policy on further developing PPP (public-private-partnership) model.
* Farmers need access to affordable credit.
* Moving to improve nutritional security.
* Necessary to accelerate production of fodder.

ON THE STATE OF THE ECONOMY
* "Fiscal consolidation has been impressive. This year has also seen significant progress in
those critical institutional reforms that will pave the way for double digit growth in the near
future."
* "At times the biggest reforms are not the ones that make headlines, but the ones concerned
with details of governance which affect the everyday life of aam aadmi (common man). In
preparing this year's budget, I have been deeply conscious of this fact."
* Food inflation remains a concern
* Current account deficit situation poses some concern
* Must ensure that private investment is sustained
* "The economy has shown remarkable resilience."
* Setting tone for newer, vibrant economy.
* Economy back to pre-crisis trajectory.
* Development needs to be more inclusive.

ON GOVERNANCE
* "Certain events in the past few months may have created an impression of drift in
governance and a gap in public accountability ... such an impression is misplaced."
* Corruption is a problem, must fight it collectively

MORE
* Govt to move towards direct transfer of cash subsidy for kerosene, LPG and fertilisers.
* Financial Sector Legislative Reforms Commission, to be headed by former Supreme Court
judge B Srikrishna, to complete its work in 24 months; to overhaul financial regulations.
* Five-fold strategy against black money; 13 new double taxation avoidance agreements;
foreign tax division of CTBT strengthened; strength of Enforcement Directorate increased
three-fold.
* Bill to be introduced to review Indian Stamp Act.
* New coins carrying new rupee symbol to be issued.
* Anganwadi workers salary raised from Rs.1,500 to Rs.3,000.
* Mortgage risk guarantee fund to be created for economically weaker sections.
* Housing loan limit for priority sector lending raised to Rs.25 lakh.

Read More