Indian Budget 2010 – Highlights |Income Tax Ready Reckoner

Highlights of 2010-11 budget presented by Finance Minister Pranab Mukherjee in parliament Friday:

– Clean energy cess of Rs.50 per tonne on coal produced in India

– Concessional duty of 4 percent for solar power rickshaw developed by Council of Scientific and Industrial Research

– Concessional customs duty of 5 percent for cable TV operators for importing equipment

– Toys fully exempt from central excise duty

– Service sector tax retained at 10 percent to aid the introduction of GST; more services to be taxed

– Accredited news agencies exempt from service tax

– Net revenue gain Rs.22,500 crore

– Taxes on large cars and SUVs increased 2 percent to 22 percent

– Basic duty of 5 percent on crude oil restored

– Tax on cigarettes, cigars and chewing tobacco increased

– Rs. 26,000 crore revenue loss due to reduction of direct taxes

– Partial roll back of reduction in central excise duty

– Income up to Rs.1.6 lakh per year exempt from income tax; up to Rs.5 lakh to be taxed at 10 percent; income of Rs.5-8 lakh to be taxed at 20 percent and income above Rs.8 lakh to be taxed at 30 percent

– IT returns forms for individual tax payers to be further simplified

– Expenditure in 2010-11 estimated at 11,l8,749 crore

– Fiscal deficit estimated at 5.5 percent in 2010-11; an improvement of 1 percent over 2009-10

– Two more centralised tax processing centres to be set up in addition to the one at Bangalore

– National Social Security Fund created for workers in unorganised sector with allocation of Rs.1,000 crore

– Government to give Rs.1,000 for each National Pension Scheme account opened by workers in the unorganised sector

– Exclusive skill development programme for the textile sector

– Fifty percent hike in allocation for schemes for women and child development

– Rs.4,500 crore allocated for ministry of social justice and empowerment, a hike of 80 percent

– Rs.2,600 crore allocated for ministry of minorities affairs

– Rs.1,900 crore for Unique Identification Authority of India

– Rs.147,344 crore allocated for defence

– 2,000 youth to be recruited in central paramilitary forces

– Draft Food Security Bill prepared and will be put in the public domain

– Allocation on primary education raised from Rs.26,800 crore to Rs.31,300 crore

– Banking facilities to be provided to all habitations with a population of 2,000 and more

– Rs.66,100 crore allocated for rural development in 2010-11; Rs.40,100 crore for National Rural Employment Scheme; RS.48,000 crore for Bharat Nirman

– Rs.1,270 crore allocated for Rajiv Awas Yojana for slum dwellers, up from Rs.150 crore, an increase of 700 percent with the aim of creating a slum free India.

– Forty-six percent of plan allocations in 2010-11 will be for infrastructure development

– Coal Regulatory Authority to be set up to benchmark standards of performance

– Allocation for new and renewable energy sector increased 61 percent from Rs.620 crore to Rs.1,000 crore in 2010-11

– National Clean Energy Fund to be established

– Rs.200 crore allocated as special package for Goa to prevent erosion and increase green cover

– Government committed to growth of SEZs

– Four-pronged strategy for growth of agricultural sector

– Rs.200 crore to be provided in 2010-11 for climate-resilient agricultural initiative

– Involvement of private sector in grain storage to continue for another two years

– In view of drought and floods, debt repayment period extended to June 2010

– Five more mega food processing projects in addition to 10 existing ones

– FDI flows in April-December 2009 $20.9 billion

– FDI policy to be made more user-friendly with one comprehensive document

– Apex level financial stability council to be set up for banking sector

– Indian Banking Association to give additional licences to private players

– Provision for further capital for regional rural banks

– Roadmap for reducing public debt in six months

– Implementation of direct tax code from April 2011

– Government actively engaged in finalising structure of general sales tax regime; hopes to implement it from April 2011

– New fertiliser policy from April 2010; will lead to improved productively and more income for farmers

– Economy stabilised in first quarter of 2009-10; strong rebound in second quarter; overall growth at 7.2 and could be higher when Q3 and Q4 are taken into account

– Export figures for January encouraging

– Hope to breach 10 percent growth mark in not too distant future

– Government set in motion steps to bring down food inflation

– Need to review stimulus package; need to make growth more broad-based

– India has weathered global economic crisis well; Indian economy in far better position than it was a year ago. In 2009 Indian economy faced grave uncertainty; delay in southwest monsoon had undermined agricultural production

– First challenge now is to quickly revert to 9 percent growth and then aim for double digit growth; need to make recovery more broadbased

– Second challenge is to make growth more inclusive; have to strengthen food security

– Third challenge is to overcome weakness in government’s public delivery mechanism; a long way to go in this