BUDGET 2011 AT A GLANCE  (FINANCE BILL 2011 HIGHLIGHTS)

A)    DIRECT TAX PROPOSALS

INCOME TAX

1)       Basic Tax exemption limit raised from Rs 1.6 lakh to Rs 1.8 lakh.

2)      Eligible age limit for increased exemption threshold for Sr Citizens reduced from 65 to 60 years;

3)      Exemption for Sr Citizens above 80 – New Category created with exemption upto Rs 5 lakh.

4)      Taxpayers earning only Salary with entire tax liability discharged through TDS not required to file tax returns.

5)      Sulabh Form to be introduced for small taxpayers.

6)      Surcharge on domestic companies reduced from 7.5% to 5%.

7)      MAT rate hiked from 18% to 18.5%; SEZ developers and units in SEZs to pay MAT.

8)      Foreign dividend brought back to India by domestic companies to be taxed at concessional rate of 15%.

9)      SEBI-registered Mutual Funds allowed to accept subscriptions from KYC-compliant foreign investors.

10)   Transfer Pricing: Second proviso to Sec 92C(2) proposed to be amended to do away with variation of plus/minus 5%;  to be substituted by percentage to be notified by CBDT.

11)    CBDT to notify 'Tool-Box' of counter-measures to deal with non-cooperative tax havens .

12)   Foreign dividend in hands of resident Indians to attract 15% tax.

Direct taxes proposal to result in Rs 11500 Cr loss.

B)    INDIRECT TAX PROPOSALS

SERVICE TAX

1)       Unambiguous definitions of input services proposed.

2)      Service taxpayers with turnover of Rs 60 lakh exempted from Service Tax/CERA Audit. Penal provisions in Service tax streamlined.

3)       Service tax - Cenvat Credit rules to be rationalized.

4)      Service tax refund to exporters and SEZ Units: A new scheme to be notified soon.

5)      Service tax levied on the following new services/Coverage enhanced  :-

·                     Hotel accommodation above Rs 1000 per day with 50% abatement.

·                     AC Restaurants providing liquor.

·                     Diagnostic labs .

·                     Air travel (Rate hiked by Rs 50).

·                     Legal services provided by individuals to business.

       Service tax proposals to generate Rs 4000 Cr.

EXCISE

1)       Jumbo rolls import granted exemption.

2)      Capital goods for mega power projects - excise duty exemption granted to domestic suppliers.

3)      Hybrid vehicles - full exemption from BCD and CVD.

4)      Branded garments / made-up - Excise duty levied to 10%.

5)      Excise duty raised from 4% to 5% on items attracting 5% VAT.

6)      Central Excise exemption withdrawn on 130 consumer items; 8% duty levied.

Excise proposals to generate Rs 7000 Cr revenue.

CUSTOMS DUTY

1)       Self-assessment system announced for Customs duty.

2)      Customs duty on inputs for cement industry reduced.

3)      Export duty on all sorts of export of iron ores raised to 25%.

4)      Basic customs duty reduced on paper, chemicals, yarns etc.

5)      Agri equipments - import duty reduced to 2.5%; Micro-irrigation equipment- Duty reduced.

6)      Customs Peak Rate - no change; Rationalisation of Customs rates proposed.

C)     FINANCE BILL – OTHER PROVISIONS/ANNOUNCEMENTS

·         Direct Tax Code (DTC) Bill to be finalized soon.

·         Constitutional Amendment Bill for GST (Goods and Services Tax – Consolidation of VAT, Excise, Service Tax etc.) to be tabled in Parliament during the current budget session.

·         LIC Corporation Bill + Insurance Amendment Bill + Banking Amendment Bill, Banking Regulation Act etc to be tabled.

·         Pilot GST Portal to be put online by June.

·         Indian Stamp Act to be amended; Govt to table Bill soon; Rs 300 Cr to be given to States to switch over to e-stamping.

·         UID (Unique Identification No.) scheme - AADHAR Numbers - Rs 10 lakh numbers to be generated from Oct 1, 2010.

·         Govt to come out with manufacturing policy; to taget 25% growth in next 10 years; Two Committees set up and recommendations to be made available in two months.

·         Rs 1000 Cr more setting up E-courts and judicial reforms.

·         Rs 9 lakh ex-gratia payment for para military personnel on disability.

·         Investment linked deduction proposed for fertiliser and affordable housing.

·         SEBI-registered Mutual Funds to directly access FIIs' funds + FIIs can invest upto USD 40 bn in bonds.

·         Rs 200 Cr allocated for cleaning up Lakes of special importance.

·         Black Money Problem: 1200 Cases booked for money-laundering in 2010.

·         Investment in fertiliser sector, Cold chain warehouses to be treated as sub-sector of infrastructure sub-sector.

·         17% hike in allocation for social sectors.

·         150th Anniversary of Tagore: Rs 1 Cr Award for promoting Universal Value of Brotherhood.

·         Rs 500 Cr more for National Skill Development Council.

·         Govt accepts TAGUP Reports on unique projects.

·         Rs 300 Cr to promote pulses-village in rain-fed areas.

·         Pre-Matric scholarships introduced for SCs / STs.

·         Rs 21000 Cr allocated for Sarvasiksha Abhiyan.

·         Anganwadi workers to get Rs 3000 per month; Helpers to get Rs 1000.

·         Rs 300 Cr allocated for vegetable centres to be set up.

·         Rs 3000 Cr to be allocated to NABARD for handloom weavers (Infusion in equity).

·         To fund micro-finance, Rs 100 Cr corpus to be created with SIDBI.

·         Interest subvention for housing loans for poor extended + Rural Housing Fund to get Rs 1000 Cr more.

·         Direct Transfer of Subsidy on Kerosene. Fertiliser and LPG: Nilekani to submit report by June.

·         Rs 40,000 Cr revenue to be mobilised from disinvestment in 2011-12.

·         Fiscal deficit to be brought down to 4.6%.

·         Total expenditure to be Rs 12,50,000 Crore - Gross tax receipts to be Rs 9,25,000 Cr.

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