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Budget === Highlights of Indian Union Budget 2012

Budget === Highlights of Indian Union Budget 2012

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Published by Lokesh Verma

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Published by: Lokesh Verma on Aug 04, 2012
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11/03/2013

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Highlights of Indian Union Budget 2012-13
Finance Minister Pranab Mukherjee on Friday announced marginal tax reliefs for individual tax payers. Presenting Union Budget 2012-13 inLok 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 lakhat 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 medicalinsurance, 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 headlineinflation 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%
 
Securities Transaction Tax cut by 20% for stock market orders
Service Tax
 
 
Service Tax rate up from 10% to 12%
 
Higher Service Tax to add Rs 186.6 bn in revenue
 
Duty-free baggage allowance for Indians increased to Rs 35,000
 
Duty-free baggage allowance for children increased to Rs 15,000
Proposal to tax all services except negative list 
 Exempted services include:
 
Government services
 
Pre-school, school education, recognised education at higher levels and approved vocational education
 
Renting of residential dwellings, entertainment and amusement services to be exempt
 
Public transportation to be exempt from service tax
 
Agricultural activities and animal husbandry to be exempt from service tax
 
Health care
 
Charities, religious persons
 
Sportspersons
 
Performing artists in folk and classical arts
 
Individual advocates providing services to non-business entities
 
Independent journalists
 
Services related with animal care and car parking
 
Services of business facilitators and correspondents to banks and insurance companies
 
 
Construction services relating to specified infrastructure, canals, irrigation works, post-harvest infrastructure, residential dwelling,and low-cost mass housing up to an area of 60 sq. mtr.
 
Exemption for the monthly charges payable by a member to a housing society up from Rs 3,000 to Rs 5,000
 
Industry related with cinematographic films
 
To set up a Study Team to examine the possibility of a common tax code for service tax and central excise
 
New scheme to simplify refunds
Indirect Taxes
 
Other Indirect Taxes
 
 
Standard Excise duty raised from 10% to 12 %
 
Merit Excise duty raised from 5% to 6 %
 
Lower merit rate raised from 1% to 2 %
 
Lower merit rate for coal, fertilisers, mobile phones and precious metal jewellery retained at 1%
 
Excise duty on large cars up from 22% to 24%
 
Customs duty cut to 2.5% on sugarcane planter, root or tuber crop harvesting machine and rotary tiller and weeder
 
Customs duty cut to 5% on specified coffee plantation and processing machinery
 
To extend project import benefit to green house and protected cultivation for horticulture and floriculture
 
Customs duty cut to 5 % on some water soluble fertilisers and liquid fertilisers
 
Customs duty cut to 2.5 % on urea
 
To extend concessional import duty for Mechanised Handling Systems and Pallet Racking Systems in mandis or warehouses forhorticultural produce
 
Imports of equipment for initial setting up or expansion of fertiliser projects fully exempt for three years
 
Steam coal fully exempt, concessional CVD of 1% for two years
 
Natural Gas and Liquified Natural Gas exempt
 
Uranium concentrate, Sintered Uranium Dioxide in natural and pellet form exempt
 
Customs Duty on Mining machinery cut to 2.5%
 
Customs Duty on Railways safety equipment cut to 7.5%
 
Import Duty on road, tunnel boring equipment fully exempt
 
Parts of aircraft, testing equipment and tyres exempt
 
Customs Duty on coating material for manufacture of electrical steel cut to 5 %
 
Nickel ore and concentrate and nickel oxide/ hydroxide fully exempt
 
Customs Duty on non-alloy, flat-rolled up at 7.5%
 
Automatic shuttle-less looms fully exempt
 
Automatic silk reeling and processing machinery fully exempt
 
Second-hand textile machinery to attract basic duty of 7.5 %
 
Duty on wool waste and wool tops cut to 5%
 
Duty on Titanium dioxide cut to 7.5%
 
Aramid yarn and fabric used for the manufacture of bullet proof helmets fully exempt
 
Duty on branded ready-made garments with up at 12 %
 
Waste Paper fully exempt
 
LCD and LED TV panels fully exempt
 
Memory card for mobile phones fully exempt
 
Duty on Adult diapers cut to 5%
 
Duty on bicycles increased to 30%
 
Duty on bicycle parts increased to 20%
 
Excise Duty on hand-made matches cut to 6%
 
Six specified life-saving drugs/ vaccines for HIV-AIDS, renal cancer etc fully exempt
 
Customs Duty on Soya protein concentrate and isolated soya protein cut to 15% and 10% respectively
 
Iodised salt to have concessional basic customs duty of 2.5%
 
Customs Duty on Probiotics cut to 5%
 
Solar energy equipment to be fully exempt
 
Excise duty on LED lamps cut to 6 %
 
Hybrid vehicle batteries to be fully exempt
 
Customs duty on gold bars, gold coins increased to 4%
 
Customs duty on non-standard gold increased to 10%
 
Customs duty on platinum increased to 4%
 
 
Basic duty on gold ore, concentrate and dore bars increased to 2%
 
Excise duty on refined gold increased to 3 %
 
Polished, coloured gem stones to attract 2% duty
 
Excise duty on cigarettes to attract ad valorem component of 10% on existing rates
 
Excise duty on hand-rolled bidis increased to 10 per thousand
 
Excise duty on machine-rolled bidis increased to `21 per thousand
 
Duty increased on pan masala, gutkha, chewing tobacco, unmanufactured tobacco and zarda scented tobacco in pouches
 
Cess on Crude petroleum oil increased to `4,500 per metric tonne
 
Customs Duty on large cars/ MUVs/ SUVs with value exceeding USD 40,000 enhanced from 60 per cent to 75 per cent ad valorem
 
Packaged cement to have unified rate of 12 % + `120 PMT for non-mini cement plants and 6 % + `120 PMT for mini-cementplants
 
Non-branded jewellery to attract excise duty of 1%
 
Branded silver jewellery fully exempt
 
Building of commercial vehicle bodies to attract an ad valorem rate of 3%
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
Growth & Divestment
 
 
Past year was supposed to be year of recovery
 
This year’s performance turned out to be disappointing
 
 
We were facing several challenges; global situation a dampener
 
GDP estimated to grow 6.9% in 2011-12
 
FY 13 GDP seen 7.6%, plus or minus 0.25%
 
Proposes Mid-term fiscal goals
 
Aim to raise Rs 300 bn through sales of stakes in state run companies next fiscal
 
Aim to raise Rs 140 bn through sales of stakes in state companies this fiscal
 
Agri, Services performing well
 
Industry pulled down growth in past two years
 
Industry now showing signs of recovery
 
FY 12 Services growth at 9.4%
 
FY 12 Industry growth at 3.9%
 
FY 12 Agri growth at 2.5%
 
Need to improve supply side of economy
 
India still front runner in world; share of trade has increased
 
Crude oil prices to cross USD 115/barrel
Five main objectives:
 
 
Focus on domestic demand driven growth recovery
 
Create conditions for rapid revival of high growth in private investment
 
Address supply bottlenecks in agriculture, energy and transport sectors, particularly in coal, power, national highways, railwaysand civil aviation
 
Intervene decisively to address the problem of malnutrition especially in the 200 high-burden districts

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