Budget 2012 Live

Finance Minister Pranab Mukherjee on Friday announced tax relief for individual tax payers. Presenting Union Budget 2012-13 in Lok Sabha, Mukherjee said income upto Rs 2 lakh would be tax free; income from Rs 2 to 5 lakh would be taxed at 10%; from Rs 5 to 10 lakh at 20%; and income above Rs 10 lakh would attract tax of 30%.

In other tax measures, Mukherjee announced that interest from savings account up to Rs 10,000 would be tax free. Also, apart from medical insurance, an additional Rs 5,000 would be exempted for preventive health check-ups.

Senior Citizens have been exempted from filing advance tax.

Meanwhile, Service Tax has been hiked from 10% to 12%. Also, its net has been widened and all services barring 17 would now be taxed. Corporate Tax structure has been left unchanged.

Mukherjee earlier said India continues to remain among front-runners in economic growth. Mukherjee however said the economic growth is estimated at 6.9 percent during the current fiscal year which was "disappointing". The Finance Minister also exuded confidence that headline inflation would moderate in the next few months and remain stable.

Income Tax

• Tax collection up 15%


Income Tax proposals:


• Personal Income Tax slabs for individuals relaxed


• Exemption limit enhanced from Rs 1.8 lakh to Rs 2 lakh


• Upper limit of 20% tax raised from Rs 8 lakh to Rs 10 lakh


New Slabs as follows:


• Upto Rs 2 lakh - Nil


• Rs 2-5 lakh - 10%


• Rs 5–10 lakh – 20%


• Above Rs 10 lakh – 30%


• Interest from savings account up to Rs 10,000 to be exempt from tax


• In addition to medical insurance, an additional Rs 5000 to be exempted for preventive health check-ups


• Senior Citizens exempted from filing advance tax


• Compulsory reporting of assets sold abroad


Corporate Tax


• Corporate Tax structure left unchanged


• Withholding tax on certain overseas borrowings reduced to 5% from 20%


• Cuts securities transaction tax by 20% for stock market orders


Service Tax


• Service Tax rates raised from 10% to 12%


• To bring more businesses under Service Tax net; only 17 services exempted now


• Higher Service Tax to add Rs 186.6 bn in revenue


• Changes in direct taxes to result in revenue loss of Rs 45 bn


• Government services, public transport exempted from services tax


• Standard excise rate hiked to 12% from 10%


Tax Reforms


• Advanced pricing agreement in DTC to be in Financial Bill


• New tax exemption on individual share invest with lock-in


• GST network to get operational from Aug


• GST under progress, talks on with states for drafting law


• To examine parliamentary panel report on Direct Tax Code


• Rajiv Gandhi Equity Saving Scheme launched


• Rajiv plan equity invest lock-in period to be 3 years


• Rs 50000 tax exempt for share invest in new Rajiv plan


• Tax exemption on individual share invest below a million rupees


• Tax free infra bonds Rs 600 bn to be issues FY 13


• To allow Rs 100 bn NHAI tax free bonds FY 13


• To allow Rs 100 bn IRFC tax free bonds in FY 13


• To allow Rs 50 bn HUDCO tax free bonds FY 13


• To allow Rs 50 bn SIDBI tax free bonds FY 13


• To allow Rs 100 bn power sector tax free bonds FY 13


• To okay Rs 50 bn National Housing Bank tax free bonds


• 1% loan sop plan for home loans up to Rs 2.5 mn


• Interest subvention on low cost homes extended by a year


Other Budget Highlights


• GDP to grow by 6.9% in 2011-12


• This year’s performance disappointing


• India still among front runners in economic growth


• Monetary policy was geared towards containing inflation


• Need to improve supply side of economy


• Exports grew 23 %


• Imports grew 29%


• Past year was supposed to be year of recovery


• To keep subsidies under 2% of GDP over next 3 years


• We were facing several challenges; global situation a dampener


• Industry pulled down growth in past two years


• Industry now showing signs of recovery


• Need to improve supply side of economy


• Subsidy for food security law to be fully provided


• Some subsidies inevitable


• Agriculture to services performed well


• Economy now turning around


• Manufacturing on cusp of revival


• Need to improve micro-economic environment


• Expect headline inflation to moderate in the next few months and remain stable


• Agri growth at 2.5%


• External trade growth encouraging


• India has successfully achieved diversification of import and export market


• Diversification has helped overcome global slowdown


• Current account deficit at 3.6%


• Fiscal balance has deteriorated due to increase in direct tax seepages and increased subsidy


• Expect smaller fiscal deficit in the coming year


• Concept of effective revenue deficit is being brought in as a fiscal parameter


• Crude oil prices to cross USD 115/barrel


• Need to take a close look at revenue expenditure, particularly subsidies


• Endeavour to restrict subsidy to under 2% of GDP


• Recommendation of task force under Nandan Nilekani has been accepted


• Direct transfer of fertilizer subsidy to retailer and then on to farmer to be rolled out


• Direct transfer of kerosene subsidy pilot project in Alwar, Rajasthan


• Direct subsidy transfer to be implemented in at least 50 more districts soon


• DTC to be implemented at the earliest


• The structure of GST network has been approved by EGoM


• Treasury management for CPACs has been enhanced


• Rs 30000 cr to be raised via disinvestment


• At least 51% stake will remain with the govt


• FDI in multi-band retail held in abeyance


• GST to be operational by August 2012


• Provision for advance pricing agreement included in DTC bill


• Reform in financial sector has been pursued to ensure more market intervention


• New scheme - Rajiv Gandhi equity scheme - to be introduced


• Simplifying process of IPOs


• Mandatory for companies to issue stocks over Rs 10 cr through online system


• 8 financial amendments bills to be introduced this year


• Central Know Your Customer repository would be set up


• 70,000 habitations have been provided with banking services


• Ultra small branches would be set up


• Swabhiman campaign to be extended to habitations with population of 1000 people


• 81 Regional Rural Banks have migrated to core banking


• Weak RRBs to be recapitalized for another two years


• Viability gap funding under PPP is an important factor


• Oil and gas and LNG storage and oil gas pipeline, telecom towers will also be made eligible under viability gap finding


• The first infra debt fund with a outlay of Rs 8,000 cr has been launched


• Tax free infra bonds to be raised to Rs 60,000 cr


• Coal India has been advised to sign power purchase agreements with power plants


• 8,800 km roads to be covered under NHDP


• ERCB for capex of toll system and maintenance


• ECB for working capital requirement of aviation industry for a period of 1 year with an upper cap of USD 1 bn


• Delhi-Mumbai industrial corridor has made progress


• USD 4.5 bn has come Japan for DMIC


• ECB for low cost housing


• New handloom cluster in Prakasam and Guntur districts of AP and leather cluster in Jharkhand


• Power loom mega cluster in Ichalkaranji in Maharashtra


• India opportunity venture fund to be launched


• 1% interest subvention for homes costing less than Rs 25 lakhs to continue


• RKBY under Rs 300 cr for irrigation program


• National food security mission, integrated development of pulses villages


• National mission of sustainable irrigation being taken up


• National mission on oil seed and oil palms


• Rs 500 cr for aquaculture


• Rs 10,000 cr to NABARD to refinance RRBS


• Kisan card can be operated from ATMs


• Allocation for SC/ST increased to Rs 37,113 crore


• Food security a legal entitlement


• PDS network being created using AADHAR platform


• Multispectral programs to address maternal nutrition to be rolled out in select district


• Budget OKs overseas borrowing to part-fund power projects' rupee debts


• Budget approves overseas borrowing of upto USD 1 bln for airlines' working capital needs


• Budget OKs overseas borrowing for low-cost housing projects


• To increases outlay for agriculture by 18% to Rs 202.08 bn


• India to be self sufficient in urea manufacturing in 5 years


• Foreign borrow for capex to maintain, operate toll roads


• Irrigation including damns under viability gap funding FY 13


• Irrigation, fertilizer, terminal market under viability gap funding


• To allow Rs 100 bn NHAI tax free bonds FY 13


• To allow Rs 100 bn IRFC tax free bonds in FY 13


• To allow Rs 50 bn HUDCO tax free bonds FY 13


• To allow Rs 50 bn SIDBI tax free bonds FY 13


• To allow Rs 100 bn power sector tax free bonds FY 13


• Inter ministerial panel to monitor allocated coal mines


• To OK Rs 50 bn National Housing Bank tax free bonds


• ECBs allowed to part finance rupee debt of power projects


• Hike in agri credit by Rs 1 tnh To Rs 5.75 tn next FY


• Outlay for agriculture up by 18% to Rs 202.08 bn


• Mid-Day meal scheme allocated Rs 11937 cr


• RG for empowerment of adolescent girls scheme gets 750 cr


• Rural drinking water and satiation allocated 14000 cr


• PMGSY get Rs 24000 cr


• Backward region development fund allocated Rs 12040 cr


• Development projects for drought mitigation in Bundelkhand and other select areas Rs 20000 cr


• Rs 5000 cr for developing warehousing facility


• 6000 schools to be set up at block levels and developed as model schools


• No new case of polio was reported in last one year


• New vaccine unit to be set up near Chennai


• NRHM enlarged to include iodine deficiency and vaccination


• NRHM allocated Rs 20822 cr


• National urban health mission launched


• Seven more govt medical colleges to be upgraded to AIIMS


• National Rural Livelihood Mission to provide self employment - allocation upped to Rs 3915 cr


• Interest subvention of additional 3% on loans upto Rs 3 lakhs to women self help groups - effective rate of 4%


• Credit guarantee fund for skill development


• In the eventuality of the death of the bread earner of a BPL family they will get Rs 10,000


• Rs 25 cr to Institute of Rural Management in Anand


• Rs 100 cr for Kerala agricultural University


• Rs 50 cr of Dharwad Agriculture University


• Rs 50 cr to Agri universities in Haryana, Odisha


• Indira Gandhi pension scheme beneficiaries to get Rs 300 pm as against current Rs 200


• National population registry project to be completed in the next two years


• 14 cr AADHAR number generated


• AADHAR is ready for payments under MGNERGA, pension scheme


• 82 double tax avoidance agreements have been finalized


• 17 tax info sharing agreements has been finalized


• Will table white paper on black money


• Dedicated information cells to track black money


• Allowed direct import of ATF by airlines


• Realtors can borrow from overseas for low cost home projects


• Gave Rs 40 bn in FY 13 for rural housing Vs Rs 30 bn in FY 12


• Announces 2 new handloom mega clusters


• To set up 3 technical assistance centres for textiles


• Allot Rs 700 mn for Maharashtra power loom cluster


• East Indian states produced 7 mn tones more of paddy


• Rs 5 bn pilot plan in 12 plan for geo textiles in NE


• Allot 10 bn to up kharif output in NE FY 13


• Allot 4 bn to up kharif output in NE FY 12


• Rs 5.75 tn farm credit in FY 13


• Rs 100 bn to NABRAD for refinancing RRBs


• NABARD to give rural banks Rs 100 bn for short term loans


• Allocated Rs 255.55 bn under Right to Education


• Allocated Rs 208.22 bn under rural health plan FY 13


• No new case of polio


• Credit guarantee fund proposed for poor students


• Allocated Rs 31.24 bn for secondary education


• Allocated Rs 200 bn for rural infra development in FY 13


• Allocated Rs 240 bn under rural road project


• Allocated Rs 158.50 bn for child development in FY 13


• Expect gross tax receipts at Rs 10.78 tn next FY


• Total spending Rs 14.49 tn next FY


• Expect non-tax revenue at Rs 1.64 tn next FY


• Non-Plan spending Rs 9.69 tn next FY


• Fiscal deficit 5.9% of GDP this FY


• Expect Fiscal deficit 5.1% of GDP next FY


Five focus areas this year:


• Revival of domestic consumption


• Achieve condition for revival of high growth


• Remove supply bottlenecks


• Intervene decisively to address malnutrition


• Expedite improvement in delivery systems and address black money

source: http://zeenews.india.com/business/budget-2012/budget-2012-live-i-t-exemption-limit-hiked-to-rs-2-lakh_43962.html

Union Budget 2011: Pranab Mukherjee's proposals

Finance minister Pranab Mukherjee today presented the Union budget for the financial year 2011-12 in the Lok Sabha.

The budget was approved earlier this morning by the Union cabinet.

Following are the salient points and proposals made by Mukherjee in his budget speech:

* Corruption is a problem, we have to fight it collectively.

* Total food inflation is down from 20.2% last year to 9.3% in January; but it is still a matter of concern.

* Government has to reconcile ecological concerns with development aspirations.

* Budget 2011-12 will help a transition towards more transparent and result-oriented economic management.

* In current year, overall economic growth is expected at 8.6%,
agriculture growth at 5.4%, industrial growth at 8.1%, and services
growth at 9.3%.

* Government's principle concern is high food prices; food prices were high for cereals, while there was a spurt in prices of onions and milk.

* High current account deficit is a cause of concern.

* Current account deficit and average inflation in 2011-12 is likely to be less than current year.

* Public Debt Management Agency Bill will be introduced in the next financial year.

* Direct Tax Code Bill likely to be passed by Parliament in the next financial year after getting standing committee's report.

* Goods and Services Tax Bill will be introduced in Parliament this year.

* Government will move towards direct cash transfer of cash subsidy as regards kerosene, LPG and fertilisers from March
2012 in view of large-scale diversion.

* Government will keep up tempo of divestment process.

* Discussions on to further liberalise foreign direct investment policy.

* Portfolio investment from foreign subscriptions will be permitted in mutual funds registered with the Securities and Exchange Board of India.

* Financial-sector reforms will move forward; Insurance (amendment) Bill, LIC Bill and Pension Development Authority Bill will be introduced in the current session of Parliament.

* Banking Laws (Amendment) Bill, SBI Subsidiaries Bill and BIFR
Bill will also be introduced in the current session.

* Rs6,000 crore will be given to public-sector banks to maintain capital-to-risk assets ratio norms.

* Indian micro finance equity with SIDBI will be formed at Rs100 crore.

* Proposal to increase rural housing fund to Rs3,000 crore.

* Proposal to raise housing loan limit from Rs20 lakh to Rs25 lakh from priority-sector lending.

* Government plans to create a Women's Self Help Group
Development Fund with a corpus of Rs500 crore.

* Allocation under the Rashtriya Krishi Vikas Yojana will be raised from Rs6,755 crore in the current year to Rs7,860 crore.

* Rs300 crore are being provided to promote pulses cultivation in rain-fed areas, another Rs300 crore to promote farm product cultivation.

* Credit flows to farmers will be raised from Rs3.75 lakh crore to Rs4.75 lakh crore.

* Government proposes to promote organic farming methods
to enable farmers to get the best from their land.

* Existing interest subvention scheme on short-term farm loans at 7% interest will continue.

* NABARD's capital base will be strengthened; the bank will be given Rs10,000 crore as a short-term credit fund.

* Tax-free bonds of Rs30,000 crore will be issued for infrastructure development. This will cover the Warehousing Corporation of India, National Highways Authority of India, IRFC, and Housing and Urban Development Corporation.

* Capital investment in fertiliser production will be considered infrastructure sub-sector.

* A new scheme will be introduced for refund of service tax on lines of drawback of duties.

* Proposal to introduce self-assessment of customs duty under which importers and exporters will themselves assess the duty they have to pay.

* Remuneration of aanganwadi workers has been raised from Rs1,500 a month to Rs3,000. Helpers will get Rs1,500, up from Rs750.

* Rs50 crore grant to Aligarh Muslim University centres in Murshidabad in West Bengal and Malappuram in Kerala.

* Old age pension for persons aged 80 and above will be raised from Rs200 to Rs500.

* Budgetary allocation of Rs100 crore for Ladakh and Rs150 crore for Jammu for implementation of projects identified by task force.

* Rs9 lakh compensation will be given to men of the defence and central paramilitary forces in case they suffer from permanentdisability and are discharged from service.

* Rs300 crore will be provided as assistance to states to modernise stamps and registration administration.

* Budget estimates for 2011-12 project Rs9,32,440 crore — an increase of 24%.

* Net tax to Centre will be Rs6,64,457 crore. Non-tax receipts are pegged at Rs1,25,435 crore.

* Fiscal deficit has been brought down from 5.5% to 5.1% in 2010-11. In 2011-12, it will be brought down further to 4.6%.

* Total plan expenditure will go up cent per cent in nominal terms in the next year.

* Revenue deficit has been fixed at 2.3% in revised estimates for 2010-11 and 1.8 per cent in projections for 2011-12.

* Threshold income-tax limit is being raised from Rs1.6 lakh to Rs1.8 lakh.

* Exemption limit for senior citizens above 80 years of age is being increased to Rs5 lakh.

* Minimum alternate tax (MAT) is being raised from 18% to 18.5% of book profits.

* Proposal to extend investment on long-term infrastructure bonds by one more year.

* Investment-linked deductions will be provided for fertilisers and developers of affordable housing.

* Eligibility age for senior citizens for tax exemptions is being reduced to 60 from 65 years.

* Net loss from direct tax proposals has been estimated at Rs11,500 crore.

* The central government's debt in proportion to the GDP will be 44.2% in 2011-12.

* Standard rate of central excise duty has been maintained at 10%.

* CENVAT (central value-added tax) rates will remain unchanged.

* Nominal 1% central excise duty will be levied on 130 items entering the tax net. Basic food, fuel and precious stones as well as gold and silver jewellery will be exempted.

* Peak rate of customs duty is being maintained at 10% in view of the global economic situation.

* Basic customs duty on agricultural machinery will be reduced to 4.5% from 5%.

* Basic customs duty on raw silk reduced from 30% to 5%.

* Export duty rates on iron ore are being unified and kept at 20% ad valorem.

* Excise and customs duty proposals are expected to result in a net gain of Rs7,300 crore.

* The service-tax net is being widened to cover hotel accommodation costing more than Rs1,000 a day, air-conditioned restaurants serving liquor, and some categories of hospitals and diagnostic tests.

* Service tax on air travel is being increased by Rs50 for domestic travel and Rs250 for international travel in the economy class. In higher classes, the tax will be a flat 10%.

* Some legal services will be brought under the service-tax net. Service by an individual to another individual is exempted.

* Net revenue loss on account of taxes and duties is estimated at Rs200 crore.

* Service-tax proposals are expected to result in a revenue gain of Rs4,000 crore.

* Net revenue loss on account of direct taxes will be Rs11,500
crore. Net revenue gain on account of indirect taxes will be Rs11,300 crore.

source : http://www.dnaindia.com/money/report_union-budget-2011-pranab-mukherjee-s-proposals_1513562