Budget 2012- Personal Taxation or Income Tax on Individuals.

Friends,   Major effects  in Budget 2012-13 on Income Tax on Individuals are detailed given below :-

• Personal Income Tax rates rationalized.  Basic exemption limit to be increased to Rs. 2 Lakh for both women and men, thereby removing gender discrimination.  30% rate of income tax to be attracted in respect of total income above Rs. 10 Lakhs.
  
• Deduction of up to Rs. 10,000 in respect of interest on savings account in bank, post office or co-operative society engaged in the business of banking.
  
• Deduction of up to Rs. 5,000 in aggregate for preventive health check-up of the assessee, his family and parents.   This is within the overall limit specified under section 80D.  However, payment for preventive health check-up can also be made in cash to qualify for deduction.
  
• Senior citizens not having business income to be exempted from payment of Advance Tax.
  
• Age of senior citizen for availing higher deduction for medical insurance premium, medical treatment of a specified disease or ailment, etc.  to be aligned with the reduced age of 60 years for availing higher basic exemption limit of  Rs. 2,50,000 applicable to senior citizens.
  
  
• Deduction under section 80C in respect of Life Insurance Premium paid to be allowed for only so much of premium as does not exceed 10% of the actual capital sum assured, in respect of policies issued on or after 1st April, 2012.  Currently, the limit is 20% of actual capital sum assumed.
  
• Further, exemption under section 10(10D) in respect of any sum received under a life insurance policy issued on or after 1st April, 2012, would be available only where the premium payable for any of the years during the life of the policy does not exceed 10% of actual capital sum assured. 

Budget 2012- Alternate Minimum Tax (AMT) levy to be extended to all Persons, other than companies

Friends,

• Alternate Minimum Tax (AMT) levy @18.50% to be extended to all persons claiming profit linked deduction, other than companies.   At present, only limited liability partnerships are subject to AMT.
  
  
  
• However if the adjusted total income does not exceeds Rs. 20 Lakh for individuals, HUFs, AOPs, BOIs and Artificial Juridical Persons, the provisions for levy of Alternate Minimum Tax would not be applicable. 

Budge2012- Clarification of "Royalty" under section 9(1)(vi)

Friends,   Consideration for use of right to use of computer software is royalty and therefore, such income is deemed to accrue or arise in India by virtue of section 9(1)(vi);

               Royalty to include and always have included consideration in respect of any right, property or information whether or not. 

• the possession or control of such right, property or information is with the payer;
• such right, property or information is used directly by the payer. 
• the location of such right, property or information is in India. 

                    

Budget 2012-2013 Higlights

Tax relief to individuals, promise to curb black money, major push on infrastructure, capital market reforms and huge subsidy cut were among proposals listed by Finance Minister Pranab Mukherjee in Budget for 2012-13.

The proposals will give some direct tax relief to individuals, even as eating out, buying luxury cars, air travel, availing some professional services and investing in gold jewellery will become costlier.

FULL COVERAGE: UNION BUDGET 2012

Presenting his 7th budget in the Lok Sabha on Friday, the finance minister said the exemption limit for personal income tax was being enhanced from Rs.1,80,000 to Rs.2,00,000, even as the limit for peak rate was being raised to Rs.10,00,000 from Rs.8,00,000. 

"This will provide tax relief of Rs.2,000 to every tax payer," the finance minister said, adding: "My proposal on direct taxes will result in a revenue loss of Rs.4,500 crore."

He also announced new tax slabs under which incomes up to Rs.2,00,000 would be totally exempt, levy 10 per cent for Rs.2,00,000 to Rs.5,00,000, then 20 per cent for Rs.5,00,000 to Rs.10,00,000 and 30 per cent for incomes above Rs.10,00,000.

For the corporate sector, he said, while the tax rates were remaining unchanged, he assured cheaper access to funds for expansion, even as he tinkered with the excise rates and customs duties for specific items.

He proposed to raise the service tax rate to 12 per cent from the present 10 per cent.

In the speech, which started exactly at 11 a.m. and lasted 110 minutes, Mukherjee listed a slew of proposals that ranged from social welfare schemes and incentivising industry to fiscal consolidation and sector-specific reforms.

Assuring further liberalisation of capital markets, he announced a new equity savings scheme to extend income tax deduction of 50 per cent to those who invest up to Rs.50,000 in equities and whose annual income is less than Rs 10 lakh.

The finance minister started his speech with the cascading effect of the global slowdown on India, but yet assuring people that there were clear signs of a recovery which should see the country grow at 7.6 percent in 2012-12, against 6.9 per cent this fiscal.

"The global crisis has affected us. India's gross domestic product (GDP) is expected to grow at 6.9 percent in 2011-12, after having grown at 8.4 per cent in each of the two preceding years," the finance minister said.

"Though we have been able to limit the adverse impact of the slowdown in our economy, this year's performance has been disappointing. But it is also a fact that in any cross-country comparison, India still remains among the front-runners in economic growth."

At the same time, Mukherjee also said the Indian economy was at the cusp of a revival, as agriculture and services have continued to grow at a decent pace. It was industrial performance that was acting as a drag.

"While we do not have the aggregate figures for the last quarter of 2011-12, numerous indicators pertaining to this period suggest that the economy is now turning around. There are signs of recovery in coal, fertiliser, cement and electricity sectors."

Major High Lights in brief  (Click Here)

Income Tax Slab for Financial Year 2012-13 (Assessment Year 2013-14) (Click Here)

Exemption Limit of Income Tax hike to Rs. 3 Lakh

In order to provide the much needed relief to people, a Parliamentary panel scrutinising the Direct Taxes Code (DTC) Bill has suggested raising the income tax exemption limit to Rs 3 lakh and also hiking deduction on savings to Rs 2.5 lakh.

"The committee has adopted the report. It only needs to dot the i's and cross the t's. The report will be submitted within a week...possible ahead of the (Budget) Session", sources said after the meeting of the Parliamentary Standing Committee on Finance said.

The report, which will pave the way for debate and passage of the DTC Bill by Parliament, has also suggested retaining the corporate tax rate at 30 per cent.

It suggested there should be three tax slabs at 10 per cent, 20 per cent and 30 per cent for personal income tax .

The DTC, which will replace the Income Tax Act, 1961 and modernise the direct tax structure in the country, was referred to the Committee headed by senior BJP leader and former Finance Minister Yashwant Sinha for scrutiny in August 2010.

The government, pending approval of the DTC Bill by Parliament, is likely to introduce some measures concerning taxes in the forthcoming Budget itself to be presented by Finance Minister Pranab Mukherjee in the Lok Sabha on March 16.

The Budget Session of Parliament will begin on March 12 with President Pratibha Patil addressing the joint sitting of Members of the Lok Sabha and the Rajya Sabha.

As regards the income tax exemption limit, the Committee did not favour the suggestions of some members who wanted it to be raised to Rs 5 lakhs. It later reached a consensus on suggesting the limit of Rs 3 lakh, up from Rs 1.8 lakh currently.

The income tax exemption in the original DTC Bill has been proposed at Rs 2 lakh. 

At present, income in the bracket of Rs 1.80 lakh -Rs 5 lakh attracts 10 per cent tax, those in Rs 5 lakh -Rs 8 lakh 20 per cent, and above Rs 8 lakh at 30 per cent.

The Committee, sources said, favours raising the limit for the total tax saving deductions, which include investment in provident fund, life insurance, children education and infrastructure bonds, to Rs 2.5 lakh from Rs 1.2 lakh.

At present, investments up to Rs 1 lakh in specified instruments are deducted while calculating the tax liability.

In addition, investments up to Rs 20,000 in infrastructure bonds are also exempted from tax.

Raising the tax exemption and savings deduction limits, sources said, was necessary to compensate people reeling under the impact of high rate of inflation.

Although the inflation has in recent months come down to 7-8 per cent, it had remained near the double-digit mark for most of 2011.

PTI New Delhi March 3, 2012

Budget 2012-2013 Higlights

Expectations & Latest Developments-Indian Budget 2012-13 Highlights:

• Centre is planning to increase the income tax exemption for up to Rs 3 lakh paid as interest on housing loans in one year as compared to the current limit of Rs 1.5 lakh with the aim to strengthen housing sector credit.
• The tax exemption slab is expected to be increased from the present Rs 1.8 lakh to Rs 3 lakh, in case the proposed recommendation of a Yashwant Sinha-led parliamentary standing committee on finance get cleared in the Union Budget for the year 2012-13.
• Agriculture Ministry has demanded lowering of interest rate on crop loans to 3% for those farmers who pay in time, from the existing 4%.
• The micro, small and medium enterprises (MSMEs) sector is seeking separate consultations with them in the run-up to the Union Budget 2012-13.
• Stock exchanges have pitched for abolition of the Securities Transaction Tax (STT) on equity trades.
• Ministry of Petroleum & Natural Gas has requested the Union Finance Ministry to lower the excise duty on branded diesel in the upcoming Budget due to the strong decline in the sale of the fuel.
• Companies Bill is expected to be unveiled in Budget Session
• Union Budget 2012 is expected to witness Union Finance Minister Mr Pranab Mukherjee attempt to push the entrepreneurs for more investment by introducing major investor-friendly policies.
• The Central government may incentivise the pharma sector to boost the higher spending in research and development and also to lower the taxes and duties on life saving drugs and active pharmaceutical ingredients (API) to offer fillip to the growth of the industry
• Centre may unveil a series of measures in the Union Budget 2012-2013 to help the export sector and also the micro, small and medium enterprises (MSMEs) in India.
• Association of Biotechnology Led Entrepreneurs (ABLE) has demanded various fiscal and tax incentives from the Union Budget.

Expectations of Common Man From Indian Union Budget 2012-13:

a) Subsidy on Gas, Oil, Fertilizer, Food etc. b) Subsidies in FDI norms in sectors like Retail, Media and BFSI etc. c) Relaxation in service taxes. d) Tax reforms like implementation of GST and DTC.

Budget :- सरकार की नजर फिर सर्विस टैक्स पर है

नई दिल्ली. सरकार की नजर फिर सर्विस टैक्स पर है। यह सरकारी खजाने के लिए सबसे कमाऊ जरिया बन गया है। तीन सालों में इसके असर से सभी जरूरी सेवाएं दस फीसदी तक महंगी हो ही गई हैं। सरकार की चली तो वह बजट में 'निगेटिव लिस्ट' का प्रावधान ला सकती है। जिसमें सर्विस टैक्स का दायरा कई और सेवाओं तक बढ़ जाएगा।
 
फिलहाल करीब 120 सेवाएं सर्विस टैक्स के दायरे में हैं। अप्रत्यक्ष लगने वाले इस कर का असर कैसे आप की जेब तक पहुंचता है? इसे इस तरह समझा जा सकता है। आप रेस्टॉरेंट में आर्डर मीनू कार्ड देखकर देते हैं। ध्यान में आपका बजट भी होता है। लेकिन बिल आता है दस प्रतिशत महंगा होकर। ये है सर्विस टैक्स का असर। ये राज्यों के कर से अलग है। ऐसा ही हाल मोबाइल फोन रिचार्ज वाउचर, रेलवे टिकट, बिल्डर को रजिस्ट्री पूर्व भुगतान जैसे लेन-देन से जुड़ा है।
 
दिल्ली की टैक्स कंसल्टेंसी फर्म डीएसपी एसोसिएट्स के सीए अतुल जैन और जयपुर के सर्विस टैक्स एक्सपर्ट संजीव अग्रवाल बताते हैं कि सर्विस टैक्स के प्रावधानों में कई पेंच हैं। मामूली फर्क से सर्विस प्रोवाइडर टैक्स से तो छूट पा लेता है, जबकि ग्राहक से उस मद में पैसा वसूल लेता है। जैसे, वही रेस्टोरेंट सर्विस टैक्स वसूल सकते हैं, जिनके पास शराब बेचने का लाइसेंस हो। लेकिन कई रेस्टोरेंट मालिक लाइसेंस ले लेते हैं। लेकिन शराब नहीं बेचते। वे खाने और अन्य सेवाओं के लिए ग्राहकों से सर्विस टैक्स के मद में वसूली करते हैं। ये लाइसेंस रद्द हो जाने के बाद भी जारी रहता है।
 
सर्विस टैक्स: तीन साल में कमाई डेढ़ गुना
सर्विस टैक्स को 1994 से लागू किया गया। पिछले तीन सालों में इसमें कई सेवाओं को जोड़ दिया गया। 2008-09 में सर्विस टैक्‍स से 65 हजार करोड़ रुपए की कमाई हुई जो 2011-12 में बढ़कर 90 हजार करोड़ होने का अनुमान है। सभी अप्रत्यक्ष करों में सबसे ज्यादा वसूली सर्विस टैक्स से होती है।
 
जहां कमाई नजर आई, वही सेवा दायरे में
 
कोर्ट में हारने पर कानून बनाती है सरकार 
सरकार ने कुछ भवन मालिकों को किराया वसूलने पर सर्विस टैक्स देने को कहा। वे मामले को कोर्ट में ले गए। जहां सरकार हार गई। इस पर 2007 में सरकार ने कानून ही बदल दिया। गैरआवासीय उपयोग पर वसूला जाने वाला भवन का किराया सेवा कहा जाने लगा। ऐसा ही बिजनेस ऑक्सीलरी सर्विस को लेकर हुआ। सरकार हार गई तो उसने कानून बनाकर उसका नाम बिजनेस सपोर्ट सिस्टम कर दिया। 
क्योंकि सेवा की कोई परिभाषा ही नहीं 
हमारे देश में सेवा की कोई परिभाषा नहीं है। सेवा का निर्धारण भी अनूठे ढंग से किया जाता है। सरकार का ऑडिट विभाग जांच के बाद कुछ सर्विस प्रोवाइडरों को टैक्स का नोटिस देता है। मामला कोर्ट तक जाता है, जहां ज्यादातर मामलों में सरकार को हार का सामना करना पड़ता है।
बिजली, पानी और रोड ट्रांसपोर्ट ही बचा है 
सर्विस टैक्स के दायरे से बुनियादी सेवाओं जैसे बिजली, पानी और रोड ट्रांसपोर्ट को बाहर रखा गया है। लेकिन सरकार रेलवे को इसके दायरे में ला चुकी है। निजी अस्पतालों पर भी पिछले साल यह टैक्स लादा गया था। बाद में वापस ले लिया गया। 
निगेटिव लिस्ट : इस पर रहेगी नजर 
यदि विरोधियों का दबाव न रहा तो सरकार इस बजट में निगेटिव लिस्ट का प्रवधान ला सकती है। गुड्स एंड सर्विसेस टैक्स (जीएसटी) में इसका प्रावधान है। इसमें सरकार अपनी तरफ से उन नियमों का ब्यौरा जारी करेगी, जिसके तहत सर्विस टैक्स नहीं देना होगा। इसका मतलब बाकी सेवाएं बिना कहे, सर्विस टैक्स के दायरे में आ जाएंगी।

Pan Card exceeds the Numbers of Tax Payers

A report says number of PAN cards far exceeds the number of tax payers. This raises concern that tax dodgers may be using multiple cards to hide income. The Income Tax ( I- T) department has issued close to 10 crore permanent account number ( PAN) cards but the number of taxpayers in the country is only one- third of this number, giving rise to serious concern that many tax dodgers are using two or more cards to conceal income.

According to the latest report of the Comptroller and Auditor General of India ( CAG), while 958 lakh PAN cards were issued till the end of March 2010 only 340.9 lakh tax returns were filed during 2009- 10.

A senior official told M AIL T ODAY that instances of assessees with two or more PAN cards have been detected which show that multiple cards are being used to hide income.

The PAN card allotted to a taxpayer is the unique identification number that helps track individual tax compliance. It has to be furnished for all major transactions and opening bank accounts so that the IT authorities can trace the money trail of assessees. ” However, this prime purpose for which a PAN card is issued gets defeated if taxpayers get hold of more than one card,” a senior official pointed out.

An I- T official confirmed that the department has now initiated the exercise to weed out duplicate PAN cards but it is will take a long time given the huge database that has to be sifted through.

According to sources, the I- T department is looking for similar names, residential addresses and identical dates of birth to detect such multiple cardholders and check tax evasion.

PAN cards are issued by the I- T department, but the front- end of the process has been outsourced to UTI Technology Services Ltd and the National Securities Depository Ltd since July 2003.

The CAG report points out that the Central Board of Direct Taxes ( CBDT) needs to identify the reasons for the huge gap between the number of PAN cards and the number of taxpayers who actually file returns. ” The gap might be due to the issuance of duplicate PAN cards and death of some PAN card holders,” it adds.

According to sources, the death of PAN card holders can account for only a small portion of this gap. ” Some of the PAN card holders use them for establishing their identity and may genuinely not be required to pay tax. But there is a huge number of individuals who are misusing multiple PANs to dodge taxes,” a senior official said. It is this category that the CAG wants the I- T department to crack down on so that tax evasion is checked and revenue collection gets a boost, a senior official said.

The report points out that the growth in direct tax revenue has not been keeping pace with the growth in gross domestic product ( GDP). The logic is that a higher GDP growth rate leads to higher incomes, which should translate into higher taxes.

However, this is not happening. The report said, for every unit of growth in the GDP, direct taxes grew from 1.7 per cent in 2005- 06 to 2.6 per cent in 2007- 08. However, this figure came down to 0.5 per cent and 0.8 per cent in 2008- 09 and 2009- 10, respectively. This sharp decline in tax buoyancy is a matter of concern, the report added.

Budget Speech in Word format

Complete Budget speech by Hon'ble Finance Minister Sh. Pranab Mukherjee is available in word format.  It contains 31 pages and 197 topices.   File size without zip in word format is only 139kb. Download the same and read in offline mode.

Download complete speech of Budget 2011-12 (click here)

CST % on Declared goods proposed to Increase 5%

     In the Budget 2011-2012,  it has been proposed to increase celling rate of CST on declared goods under section 15 from 4% to 5%.   Presently, State Governments can not levy VAT more than 4% on particular declared goods.   Declared goods are those which have been their own importance and have been defined in Clause 74 of the Finance Bill 2011-12 which runs as under :-

Declared Goods/CST

74. "In section 15 of the Central Sales Tax Act, 1956 , in clause (a), for the words "Four per cent.", the words "five per cent." shall be substituted"

The relevant notes on clause 74 runs as under 

"Clause 74 of the bill seeks to amend section 15 of Central Sales Tax Act, 1956, so as to increase the ceiling imposed though the Central Sales Tax on the power of the States to levy Vat on the "declared goods" from 4 per cent to 5 per cent."

View List of Declared Goods/Complete CST Act. (Click Here)

Latest Highlights of Budget

     The Finance Minister Sh. Pranab Mukherjee has announced following highlights  relating to Latest Uninon Budget 2011-12. Highlights of Union Budget 2011-12 Basic Income Tax Exemption has been  proposed to  Rs. 1,80,000 from Rs. 1,60,000/-Age Limit of Senior Citizen has been reduced to 60 years. Earlier it was 65 years.

HIGHLIGHTS OF BUDGET 2011-12

• Gross Domestic Product (GDP) estimated to have grown at 8.6 per cent in 2010-11 in real terms. Economy has shown remarkable resilience.
• Continued high food prices have been principal concern this year.
• Consumers denied the benefit of seasonal fall in prices despite improved availability of food items, revealing shortcomings in distribution and marketing systems.
• Monetary policy measures taken expected to further moderate inflation in coming months.
• Exports have grown by 29.4 per cent, while imports have recorded a growth of 17.6 per cent during April to January 2010-11 over the corresponding period last year.
• Indian economy expected to grow at 9 per cent with an outside band of +/- 0.25 per cent in 2011-12.
• Average inflation expected lower next year and current account deficit smaller.

   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.

   Investment

     Foreign Direct Investment

• Discussions underway to further liberalise the FDI policy.
• Foreign Institutional Investors
• SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirements for equity schemes.
• To enhance flow of funds to infrastructure sector, the FII limit for investment in corporate bonds issued in infrastructure sector being raised.
• Financial Sector Legislative Initiatives
• To take the process of financial sector reforms further, various legislations proposed in 2011-12.
• Amendments proposed to the Banking Regulation Act in the context of additional banking licences to private sector players.

   Public Sector Bank Capitalisation

• 6,000 crore to be provided during 2011-12 to enable public sector banks to maintain a minimum of Tier I CRAR of 8 per cent.
• Recapitalisation of Regional Rural Banks Rs.500 crore to be provided to enable Regional Rural Banks to maintain a CRAR of at least 9 per cent as on March 31, 2012.

   Micro Finance Institutions

• "India Microfinance Equity Fund" of Rs.100 crore to be created with SIDBI.
• Government considering putting in place appropriate regulatory framework to protect the interest of small borrowers.
• "Women's SHG's Development Fund" to be created with a corpus of Rs.500 crore. Rural Infrastructure Development Fund
• Corpus of RIDF XVII to be raised from Rs.16,000 crore to Rs.18,000 crore.

   Micro Small and Medium Enterprises

• Rs.5,000 crore to be provided to SIDBI for refinancing incremental lending by banks to these enterprises.
• Rs.3,000 crore to be provided to NABARD to provide support to handloom weaver co-operative societies which have become financially unviable due to non-repayment of debt by handloom weavers facing economic stress.
• Public sector banks to achieve a target of 15 per cent as outstanding loans to minority communities under priority sector lending at the earliest.

   Housing Sector Finance

• Existing scheme of interest subvention of 1 per cent on housing loan further liberalised.
• Existing housing loan limit enhanced to 25 lakh for dwelling units under priority sector lending.
• Provision under Rural Housing Fund enhanced to 3,000 crore.
• To enhance credit worthiness of economically weaker sections and LIG households, a Mortgage Risk Guarantee Fund to be created under Rajiv Awas Yojana.
• Central Electronic Registry to prevent frauds involving multiple lending on the same immovable property to become operational by March 31, 2011.

   Financial Sector Legislative Reforms Commission

• Financial Sector Legislative Reforms Commission set up to rewrite and streamline the financial sector laws, rules and regulations.
• Companies Bill to be introduced in the Lok Sabha during current session.

   Agriculture

• Removal of production and distribution bottlenecks for items like fruits and vegetables, milk, meat, poultry and fish to be the focus of attention this year. Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from 6,755 crore to 7,860 crore.
• Bringing Green Revolution to Eastern Region
• To improve rice based cropping system in this region, allocation of Rs.400 crore has been made.
• Integrated Development of 60,000 pulses villages in rainfed areas
• Allocation of Rs.300 crore to promote 60,000 pulses villages in rainfed areas.

     Promotion of Oil Palm

• Allocation of Rs.300 crore to bring 60,000 hectares under oil palm plantations.
• Initiative to yield about 3 lakh Metric tonnes of palm oil annually in five years.
• Initiative on Vegetable Clusters
• Allocation of Rs.300 crore for implementation of vegetable initiative to provide quality vegetable at competitive prices.

     Nutri-cereals

• Allocation of Rs.300 crore to promote higher production of Bajra, Jowar, Ragi and other millets, which are highly nutritious and have several medicinal properties.

     National Mission for Protein Supplement

• Allocation of Rs.300 crore to promote animal based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries.
• Accelerated Fodder Development Programme
• Allocation of Rs.300 crore for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages.

   National Mission for Sustainable Agriculture

• Government to promote organic farming methods, combining modern technology with traditional farming practices.

   Agriculture Credit

• Credit flow for farmers raised from Rs.3,75,000 crore to Rs.4,75,000 crore in 2011-12.
• Interest subvention proposed to be enhanced from 2 per cent to 3 per cent for providing short-term crop loans to farmers who repay their crop loan on time.
• In view of enhanced target for flow of agriculture credit, capital base of NABARD to be strengthened by Rs.3,000 crore in phased manner.
• Rs.10,000 crore to be contributed to NABARD's Short-term Rural Credit fund for 2011-12.

   Mega Food Parks

• Approval being given to set up 15 more Mega Food Parks during 2011-12.
• Storage Capacity and Cold Chains
• Augmentation of storage capacity through private entrepreneurs and warehousing corporations has been fast tracked.
• Capital investment in creation of modern storage capacity will be eligible for viability gap funding of the Finance Ministry.

   Agriculture Produce Marketing Act

• In view of recent episode of inflation, need for State Governments to review and enforce a reformed Agriculture Produce Marketing Act.

   Infrastructure and Industry

• Allocation of Rs.2,14,000 crore for infrastructure in 2011-12. This is an increase of 23.3 per cent over 2010-11. This also amounts to 48.5 per cent of total plan allocation.
• Government to come up with a comprehensive policy for further developing PPP projects.
• IIFCL to achieve cummulative disbursement target of Rs.20,000 crore by March 31, 2011 and Rs.25,000 crore by March 31, 2012.
• Under take out financing scheme, seven projects sanctioned with debt of Rs.1,500 crore. Another Rs.5,000 crore will be sanctioned during 2011-12.
• To boost infrastructure development, tax free bonds of Rs.30,000 crore proposed to be issued by Government undertakings during 2011-12.

   National Manufacturing Policy

• Share of manufacturing in GDP expected to grow from about 16 per cent to 25 per cent over a period of 10 years. Government will come out with a manufacturing policy.
• Two Committees set up for greater transparency and accountability in procurement policy; and for allocation, pricing and utilisation of natural resources. Issues relating to reconciliation of environmental concern from various departmental activities including those related to infrastructure and mining to be considered by a Group of Ministers.
• National Mission for hybrid and electric vehicle to be launched.
• Financial Assistance to be made available for metro projects in Delhi, Mumbai, Bengaluru, Kolkata and Chennai.
• Capital investment in fertiliser production proposed to be included as an infrastructure sub-sector.

   Exports

• Of 23 suggestions made by Task Force on Transaction Cost, constituted by the Department of Commerce, 21 suggestions already implemented. Action to be taken on the remaining two suggestions. Transaction Cost ofRs.2,100 crore will thus be mitigated.
• Self assessment to be introduced in Customs to modernize the Customs administration.
• Proposal to introduce scheme for refund of taxes paid on services used for export of goods.
• Mega Cluster Scheme to be extended for leather products. Seven mega leather clusters to be set up during 2011-12.
• Jodhpur to be included for the development of a handicraft mega cluster.

   Black Money

• Five fold strategy to be put into operation to deal with the problem of generation and circulation of black money.
• Membership of various international fora engaged in anti money laundering, Financial integrity and Economic development, Exchange of information for tax purposes and transparency, secured.
• Various Tax Information Exchange Agreements (TIEA) and Double Taxation Avoidance Agreements (DTAA) concluded. Foreign Tax Division of CBDT has been strengthened to effectively handle increase in tax information exchange and transfer pricing issues.
• Enforcement Directorate strengthened three fold to handle increased number of cases registered under amended Money Laundering Legislation.
• Finance Ministry has commissioned study on unaccounted income and wealth held within and outside the country.
• Comprehensive national policy to be announced in near future to strengthen controls over prevention of trafficking on narcotic drugs.

   Strengthening Inclusion

• National Food Security Bill (NFSB) to be introduced in the Parliament during the course of this year.
• Allocation for social sector in 2011-12 (1,60,887 crore) increased by 17 per cent over current year. It amounts to 36.4 per cent of total plan allocation.

   Bharat Nirman

• Allocation for Bharat Nirman programme proposed to be increased by Rs.10,000 crore from the current year toRs.58,000 crore in 2011-12.
• Plan to provide Rural Broadband Connectivity to all 2,50,000 Panchayats in the country in three years.

   MGNREGA

• In pursuance of last years budget announcement to provide a real wage of 100 per day, the Government has decided to index the wage rates notified under the MGNREGA to the Consumer Price Index for Agricultural Labour. The enhanced wage rates have been notified by the Ministry of Rural Development on January 14, 2011.
• From 1st April, 2011, remuneration of Anganwadi workers increased from Rs.1,500 per month to Rs.3,000 per month and for Anganwadi helpers from Rs.750 per month to Rs.1,500 per month.

   Scheduled Castes and Tribal Sub-plan

• Specific allocation earmarked towards Schedule Castes Sub-plan and Tribal Sub-plan in the Budget.
• Allocation for primitive Tribal groups increased from Rs.185 crore in 2010-11 to Rs.244 crore in 2011-12.

   Education

• Allocation for education increased by 24 per cent over current year.

     Sarva Shiksha Abhiyan

• Rs.21,000 crore allocated, which is 40 per cent higher than Budget for 2010-11.
• Pre-matric scholarship scheme to be introduced for needy SC/ST students studying in classes IX and X.

   National Knowledge Network

• Connectivity to all 1,500 institutions of Higher Learning and Research through optical fiber backbone to be provided by March, 2012.

   Innovations

• National Innovation Council set up to prepare road map for innovations in India.
• Special grant provided to various universities and academic institutions to recognise excellence.

   Skill Development

• Additional Rs.500 crore proposed to be provided for National Skill Development Fund during the next year.
• An international award with prize money of 1 crore being instituted for promoting values of universal brotherhood as part of National celebrations of 150th Birth Anniversary of Gurudev Rabindranath Tagore.

   Health

• Plan allocations for health stepped-up by 20 per cent.
• Scope of Rashtriya Swasthya Bima Yojana to be expanded to widen the coverage.

   Financial Inclusion

• Target of providing banking facilities to all 73,000 habitations having a population of over 2,000 to be completed during 2011-2012.

   Unorganised sector

• Exit norms under co-contributory pension scheme "Swavalamban" to be relaxed.
• Benefit of Government contribution to be extended from three to five years for all subscribers who enroll during 2010-11 and 2011-12.
• Eligibility for pension under Indira Gandhi National Old Age Pension Scheme for BPL beneficiaries reduced from 65 years of age to 60 years. Those above 80 years of age will get pension of Rs.500 per month instead of Rs.200 at present.

   Environment and Climate Change

     Forests

• Rs.200 crore proposed to be allocated for Green India Mission from National Clean Energy Fund.

     Environmental Management

• Rs.200 crore proposed to be allocated for launching Environmental Remediation Programmes from National Clean Energy Fund.

     Cleaning of Rivers and Lakes

• Special allocation of Rs.200 crore proposed to be provided for clean-up of some more important lakes and rivers other than Ganga.

     Some Other Initiatives

• To boost development in North Eastern Region and Special Category States, allocation for Special Assistance doubled.
• Rs.8,000 crore provided in current year for development needs of Jammu and Kashmir.
• Allocation made in 2011-12 to meet the infrastructure needs for Ladakh (Rs.100 crore) and Jammu region (Rs.150 crore).
• Allocation under Backward Regions Grant Fund increased by over 35 per cent.
• Funds allocated under Integrated Action Plan (IAP) for addressing problems related to Left Wing extremism affected districts. 60 selected Tribal and backward districts provided with 100 per cent block grant of Rs.25 crore and Rs.30 crore per district during 2010-11 and 2011-12 respectively.
• A lump-sum ex-gratia compensation of Rs.9 lakh for 100 per cent disability to be granted for personnel of Defence and Para Military forces discharged from service on medical ground on account of disability attributable to government service.
• Provision of Rs.1,64,415 crore, including Rs.69,199 crore for capital expenditure to be made for Defence Services in 2011-12.
• To build judicial infrastructure, plan provision for Department of Justice increased by three fold to Rs.1,000 crore.

   Census 2011

• To enumerate castes other than Schedule Castes and Schedule Tribes in Census 2011, 'caste' to be canvassed as a separate time bound exercise.

   Improving Governance

     UID Mission

• From 1st October, 2011 ten lakh Aadhaar numbers will be generated per day.

     IT Initiatives

• Various IT initiatives taken for efficient tax administration. These include e-filing and e-payment of taxes, adoption of 'Sevottam' concept by CBEC and CBDT, web based facility for tax payers to track the resolution of refunds and credit for pre-paid taxes and augmentation of processing capacity.
• Under Mission mode projects, funds released to 31 projects received from States/UTs for computerisation of Commercial taxes. This will allow States to align with roll out of GST.
• Bill to amend the Indian Stamp Act proposed to be introduced shortly.
• A new scheme with an outlay of 300 crore to be launched to provide assistance to States to modernise their stamp and registration administration and roll out e-stamping in all the districts in the next three years.
• A new simplified form 'Sugam' to be introduced to reduce the compliance burden of small tax payers falling within presumptive taxation.
• Three more benches of Settlement Commission to be set up to fast track the disposal of cases.
• Steps initiated to reduce litigation and focus attention on high revenue cases.
• Group of Ministers constituted to consider measures for tackling corruption.
• Recommendations to be made in a time bound manner.

     Performance Monitoring and Evaluation System

• In pursuance of recommendations of Second Administrative Reforms Commission, 62 departments covered under Performance Monitoring and Evaluation System (PMES) to assess their effectiveness.

   TAGUP

• Recommendations of Technology Advisory Group for Unique Projects (TAGUP) submitted and accepted in principle.

   Budget Estimates 2011-12

• Gross Tax receipts are estimated at Rs.9,32,440 crore.
• Non-tax revenue receipts estimated at Rs.1,25,435 crore.
• Total expenditure proposed at Rs.12,57,729 crore.
• Increase of 18.3 per cent in total Plan allocation.
• Increase of 10.9 per cent in the Non-plan expenditure.
• XI Plan expenditure more than 100 per cent in nominal terms than envisaged for the Plan period.
• Increase of 23 per cent in Plan and Non-plan transfer to States and UTs.
• Fiscal Deficit brought down from 5.5 per cent in BE 2010-11 to 5.1 per cent of GDP in RE 2010-11.
• Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12.
• Fiscal Deficit to be progressively reduced to 3.5 per cent by 2013-14.
• "Effective Revenue Deficit" estimated at 2.3 per cent of GDP in the Revised
• Estimates for 2010-11 and 1.8 per cent for 2011-12.
• All subsidy related liabilities brought into fiscal accounting.
• Net market borrowing of the Government through dated securities in 2011-12 would be 3.43 lakh crore.
• Central Government debt estimated at 44.2 per cent of GDP for 2011-12 as against 52.5 per cent recommened by the 13th Finance Commission.

   Tax Proposals

     Direct Taxes

• Exemption limit for the general category of individual taxpayers enhanced from Rs.1,60,000 to Rs.1,80,000 giving uniform tax relief of Rs.2,000.
• Exemption limit enhanced and qualifying age reduced for senior citizens.
• Higher exemption limit for Very Senior Citizens, who are 80 years or above.
• Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.
• Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to 18.5 per cent of book profits.
• Tax incentives extended to attract foreign funds for financing of infrastructure.
• Additional deduction of Rs.20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year.
• Lower rate of 15 per cent tax on dividends received by an Indian company from its foreign subsidiary.
• Benefit of investment linked deduction extended to businesses engaged in the production of fertilisers.
• Investment linked deduction to businesses developing affordable housing.
• Weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to be enhanced to 200 per cent.
• System of collection of information from foreign tax jurisdictions to be strengthened.
• A net revenue loss of Rs.11,500 crore estimated as a result of proposals.

     Indirect Taxes

• To stay on course for transition to GST.
• Central Excise Duty to be maintained at standard rate of 10 per cent.
• Reduction in number of exemptions in Central Excise rate structure.
• Nominal Central Excise Duty of 1 per cent imposed on 130 items entering in the tax net.
• Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.
• Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 per cent.
• Peak rate of Custom Duty held at its current level.

   Agriculture and Related Sectors

• Scope of exemptions from Excise Duty enlarged to include equipments needed for storage and warehouse facilities on agricultural produce.
• Basic Custom Duty reduced for specified agricultural machinery from 5 per cent to 2.5 per cent.
• Basic Custom Duty reduced on micro-irrigation equipment from 7.5 per cent to 5 per cent.
• De-oiled rice bran cake to be fully exempted from basic Custom Duty. Export Duty of 10 per cent to be levied on its export.

   Manufacturing Sector

• Basic Custom Duty reduced for various items to encourage domestic value addition vis-a-vis imports, to remove duty inversion and anomalies and to provide a level playing field to the domestic industry.
• Rate of Export Duty for all types of iron ore enhanced and unified at 20 per cent ad valorem. Full exemption from Export Duty to iron ore pellets.
• Basic Custom Duty on two critical raw materials of cement industry viz. petcoke and gypsum is proposed to be reduced to 2.5 per cent.
• Cash dispensers fully exempt from basic Customs Duty.

   Environment

• Full exemption from basic Customs Duty and a concessional rate of Central Excise Duty extended to batteries imported by manufacturers of electrical vehicles.
• Concessional Excise Duty of 10 per cent to vehicles based on Fuel cell technology.
• Exemption granted from basic custom duty and special CVD to critical parts/assemblies needed for Hybrid vehicles.
• Reduction in Excise Duty on kits used for conversion of fossil fuel vehicles into Hybrid vehicles.
• Excise Duty on LEDs reduced to 5 per cent and special CVD being fully exempted.
• Basic Customs Duty on solar lantern reduced from 10 to 5 per cent.
• Full exemption from basic Customs Duty to Crude Palm Stearin used in manufacture of laundry soap.
• Full exemption from basic Excise Duty granted to enzyme based preparation for pre-tanning.

   Infrastructure

• Parallel Excise Duty exemption for domestic suppliers producing capital goods needed for expansion of existing mega or ultra mega power projects.
• Full exemption from basic Customs Duty to bio-asphalt and specified machinery for application in the construction of national highways.

   Other Proposals

• Scope of exemptions from basic Customs Duty for work of art and antiquities extended to apply for exhibition or display in private art galleries open to the general public.
• Exemption from Import Duty for spares and capital goods required for ship repair units extended to import by ship owners.
• Concessional basic Custom Duty of 5 per cent and CVD of 5 per cent available to newspaper establishments for high speed printing presses extended to mailroom equipment.
• Jumbo rolls of cinematographic film fully exempted from CVD by providing full exemption from Excise Duty.
• Out right concession to factory-built ambulances from Excise Duty.
• Relief measures proposed for raw pistachio, bamboo for agarbatti, lactose for the manufacture of homoeopathic medicines, sanitary napkins, baby and adult diapers.
• Proposals relating to Customs and Central Excise estimated to result in a net revenue gain of 7,300 crore.

   Service Tax

• Standard rate of Service Tax retained at 10 per cent, while seeking a closer fit between present regime and its GST successor.
• Hotel accommodation in excess of 1,000 per day and service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax.
• Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning.
• Service Tax on air travel both domestic and international raised.
• Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net.
• All individual and sole proprietor tax payers with a turn over upto 60 lakh freed from the formalities of audit.
• To encourage voluntary compliance the penal provision for Service Tax are being rationalised. Similar changes being carried out in Central Excise and Custom laws.
• Proposals relating to Service Tax estimated to result in net revenue gain of
• Proposals relating to Direct Taxes estimated to result in a revenue loss of Rs.11,500 crore and those related to Indirect Taxes estimated to result in net revenue gain of Rs.11,300 crore.