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Budget Highlights | Union Budget 2011 – 2012

Key Features of Budget 2011-2012 :-


OPPORTUNITIES

*Fiscal consolidation targets at Centre and States have shown positive effect on
macro economic management of the economy.
*Amendment to Centre’s FRBM Act, 2003 laying down the fiscal road map for
the next five years to be introduced in the course of the year.
*Proposal to introduce the Public Debt Management Agency of India Bill in the
next financial year.

Tax Reforms
*Direct Taxes Code (DTC) to be finalised for enactment during 2011-12. DTC
proposed to be effective from April 1, 2012.
*Areas of divergence with States on proposed Goods and Services Tax (GST)
have been narrowed. As a step towards roll out of GST, Constitution Amendment

Bill proposed to be introduced in this session of Parliament.
*Significant progress in establishing GST Network (GSTN), which will serve as
IT infrastructure for introduction of GST.
Expenditure Reforms
*A Committee already set up by Planning Commission to look into the extant
classification of public expenditure between plan, non-plan, revenue and capital.
Subsidies
*Nutrient Based Subsidy (NBS) has improved the availability of fertiliser;
Government actively considering extension of the NBS regime to cover urea.
*Government to move towards direct transfer of cash subsidy to people living
below poverty line in a phased manner for better delivery of kerosene, LPG and
fertilisers. Task force set up to work out the modalities for the proposed system.

People’s ownership of PSUs

*Overwhelming response to public issues of Central Public Sector Undertakings
during current year.
*Higher than anticipated non-tax revenue has led to reschedulement of some
disinvestment issues planned for current year.
*` 40,000 crore to be raised through disinvestment in 2011-12.
*Government committed to retain at least 51 per cent ownership and management
control of the Central Public Sector Undertakings. Continue reading Budget Highlights | Union Budget 2011 – 2012

Union Budget for 2011-12: Increase in IT exemption Limit, lowering of qualifying age for tax relief

The Union Budget for 2011-12 has proposed increase in the Income Tax Exemption Limit by 20,000 rupees and lowering of qualifying age for tax relief for senior citizens from 65 to 60.

Presenting the Budget in the Lok Sabha today, Finance Minister Pranab Mukherjee proposed to increase the Income Tax Exemption Limit for individual tax payers from 1 lakh 60 thousand rupees to 1 lakh 80 thousand. Each individual tax payer will get a tax relief of 2 thousand rupees. Amidst cheers from Members, he announced reduction of qualifying age for senior citizens, and said the exemption limit to them is also proposed to be increased from 2 lakh 40 thousand rupees to 2 lakh 50 thousand. Announcing a new category of very senior citizens of 80 years and above, Mukherjee said that they will be eligible for a higher exemption limit of 5 lakh rupees.
The budget proposes lower five per cent surcharge for corporate sector, 2.5 per cent less than before. But , minimum Alternative Tax is to go up from 18 per cent to 18.5 per cent of book profits. To attract Foreign Funds for Infrastructure Projects, special vehicles to be created in the form of Infrastructure Debt Funds. Interest payments on borrowing from these funds to attract a lower 5 per cent tax from 20 per cent. To promote savings, the additional deduction of 20 thousand rupees for investment in long-term infrastructure bonds extended for one more year. A lower rate of 15 per cent of tax proposed on dividends received by an Indian company from its foreign subsidiary. Announcing liberalisaion of Housing finance, Mukherjee said the interest subvention of one per cent on housing loans extended upto 15 lakh rupees for houses that does not cost more than 25 lakhs. Existing Housing Loam limit will be enhanced to 25 lakh rupees for dwelling units under priority sector lending. Besides, investment-linked deduction will cover housing sector also and extended for agriculture sector.
Turning to Indirect Taxes, the budget proposes no change in the standard 10 per Central Excise Duty or in the Peak Customs Duty but some rationalizations made. The lower rate of duty, however, raised from 4 to 5 per cent.
Announcing the Government’s decision to stay on course towards Goods and Services Tax, Mukherjee proposed 130 more items to be brought in in the tax net with the nominal Excise Duty of one per cent. Basic food and fuel would continue to be exempt from the one per cent duty and in the case of jewellery and articles of gold, silver and precious metals, the levy will apply only to goods sold under a brand name. The optional levy of 10 per cent on readymade garments will be mandatory for branded garments. Continue reading Union Budget for 2011-12: Increase in IT exemption Limit, lowering of qualifying age for tax relief