From: CA Subhash Chandra Saraf <news@sarafchandra.in>
Highlights of Union Budget 2011
1. Personal income tax exemption limit raised to Rs 180,000 from Rs 160,000 for individual tax payers.
2. No change in tax exemption limit for women.
3. For senior citizens, exemption age limit has been reduced from 65 to 60. Their tax exemption limit will be Rs 2,50,000.
4. Apart from this, a new exemption bracket has been created for those above 80 years of age. Their tax exemption limit will be Rs 5,00,000
5. To reduce surcharge on domestic companies to 5 percent from 7.5 percent.
6. A new revised income tax return form 'Sugam' to be introduced for small tax payers.
7. Standard rate of excise duty held at 10 percent; no change in CENVAT rates.
8. To raise minimum alternate tax to 18.5 percent from 18 percent.
9. Service tax rate kept at 10 percent.
10. Nominal one per cent central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.
11. Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
12. Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat.
13. Electronic filing of TDS returns at source stabilised; simplified forms to be introduced for small taxpayers.
14. Iron ore export duty raised to 20 percent.
15. Works of art exempt from customs when imported for exhibition in state-run institutions; this now extended to private institutions.
16. Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.
17. Duty reduced on hybrid & electric cars along with batteries imported for such vehicles.
18. Ship-owners allowed duty-free spare parts import.
19. AC hospitals with more than 25 beds under service tax.
20. SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirement.
21. Indira Gandhi National Old Age Pension Scheme liberalized further.
22. Tax-free bonds of Rs. 30,000 crore proposed by government undertakings.
23. Credit flow to farmers raised from Rs. 3,75,000 crore to Rs. 4,75,000 crore
| Positive Aspects | Negative Aspects |
| Excise duty to be reduced from 10% to 5% on parts of specified machinery | AC restaurants serving liquor to come under service tax net |
| Surcharge for companies cut to 5 per cent, from 7.5 per cent | Health Check-Ups in Private hospitals to become expensive |
| Citizens over 80 years to have exemption limit of Rs 5 lakh | Expensive: International Air Travel |
| Special incentives for hybrid vehicle makers if manufacturing done in India to be positive for auto companies | Expensive: domestic air travel |
| Crude palm used in soaps exempted from customs duty to be positive for palm oil companies | Tax on life insurance service providers could be negative for insurance companies |
| Duty reduced on hybrid & electric cars along with batteries imported for such vehicles | Travel, Healthcare to become expensive due to increased service tax |
| Senior Citizen Age Limit reduced from 65 years to 60 years for Income Tax purposes | Lack of FDI in retail was a disappointment |
| The green orientation of the budget is a welcome positive | New service tax to hurt companies in hospitality |
| Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent | Hike in export duty on Iron Ore is a negative |
| Direct investment in Indian Mutual Funds by any foreigner is a big move | Branded clothes may cost more |
| MFs allowed to raise money from foreign investors is path breaking | Rise in MAT to hurt RIL, GVK Power, telecom comapnies |
| Lower fiscal deficit target is commendable | FY 11 fiscal deficit above estimates, negative |
| No import duty on ship parts positive for SCI | Divestment but no privatisation is timid |
| Tax exemption limit for senior citizens raised to Rs 2.5 lakh from 2.4 lakh | Doubled anganwaadi wages with a check on absenteeism not good |
| Budget is positive for equity markets |
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| Lower rate of 15% tax on Dividend received by an Indian Company from its Foreign Subsidiary. |
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Thanks & Regards
CA Subhash Ch. Saraf
ts only the People working in Service sector (both Public and Private) that r majorly affected by such decisions. People in Private business suffers least from it. And now they thinking of raising xemption limit to 2lacs. Isnt this a childish act? Looks as if the Government is not aware of the inflation tht it has imposed in India. Tax limits should go in-hands with inflation rate considering some lower watermark.
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