From The Economic Times
28 FEB, 2011
28 FEB, 2011
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I-T exemption limit raised to Rs 1.80 lakh from Rs 1.60 lakh
NEW DELHI: Income Tax exemption limit for individuals has been raised from Rs 1.6 lakh to Rs 1.8 lakh, giving a relief of Rs 2000 to every tax payer, in the Budget for 2011-12 which widened the Service Tax net to cover more services that will raise the cost of air travel, hotel accommodation and those who drink in AC restaurants.
Presenting his third Budget in the Lok Sabha, Finance Minister Pranab Mukherjee preferred not to roll back central excise duty levels to November 2008 and kept it at 10 per cent while he levied a nominal one per cent central excise duty on 130 items that will enter the tax net.
Basic food and fuel items will continue to be exempted while the new levy will not apply to precious metals and stones. Jewellery made of gold, silver and precious metals sold under brand name would be covered by the new levy.
Minimum Alternate Tax on book profits of companies has been raised from 18 to 18.5 per cent and the lower rate of Excise Duty raised from 4 to 5 per cent.
Mukherjee's income tax sops included reducing eligibility age of senior citizens from 65 to 60 and enhancing the exemption limit for them from Rs 2.40 lakh to Rs 2.50 lakh. He also created a new category of 'Very Senior Citizens' of 80 years and above who will be eligible for a higher exemption limit of Rs 5 lakh.
The Minister estimated a net revenue loss of Rs 200 crore in the Budget. The proposal related to indirect taxes are estimated to result in a net revenue gain of Rs 11,300 crore, including Rs 4000 crore on Service Tax expansion, while the proposals on direct taxes are expected in a revenue loss of Rs 11,500 crore.
The Budget for next year pegs the fiscal deficit at 4.6 per cent of GDP for 2011-12 which works out to Rs 4,12,817 crore. Gross tax receipts are estimated at Rs 9,32,440 crore, an increase of 24.9 per cent over Budget estimates for 2010-11.
Net non-tax revenue receipts for the next financial year are estimated Rs 1,25,435 crore. The total expenditure proposed for 2011-12 is Rs 12,57,729 crore. Plan expenditure will be Rs 4,41,547 crore, an increase of 18 per cent and non-Plan expenditure will be Rs 8,16,182 crore, an increase of 10.9 per cent over Budget estimates of 2010-11.
Here are some major tax announcements:
*Tax exemption limit raised to Rs 1.8 lakh, from Rs 1.60 lakh for individual tax papers.
*For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.
*Citizens over 80 years to have exemption limit of Rs 5 lakh.
*Surcharge for companies cut to 5 per cent, from 7.5 per cent.
* A new revised income tax return form 'Sugam' to be introduced for small tax papers.
*Service tax retained at 10 per cent; duty exemptions to be withdrawn on various items.
*Net loss from direct tax proposals estimated at Rs 11,500 crore for the year.
*Excise and customs duty proposals to result in the net gain of Rs 7,300 crore.
*Standard rate of central excise (rpt) excise duty maintained at 10 per cent; No change in CENVAT rates.
*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.
*Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.
*Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.
*Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
*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.
Presenting his third Budget in the Lok Sabha, Finance Minister Pranab Mukherjee preferred not to roll back central excise duty levels to November 2008 and kept it at 10 per cent while he levied a nominal one per cent central excise duty on 130 items that will enter the tax net.
Basic food and fuel items will continue to be exempted while the new levy will not apply to precious metals and stones. Jewellery made of gold, silver and precious metals sold under brand name would be covered by the new levy.
Minimum Alternate Tax on book profits of companies has been raised from 18 to 18.5 per cent and the lower rate of Excise Duty raised from 4 to 5 per cent.
Mukherjee's income tax sops included reducing eligibility age of senior citizens from 65 to 60 and enhancing the exemption limit for them from Rs 2.40 lakh to Rs 2.50 lakh. He also created a new category of 'Very Senior Citizens' of 80 years and above who will be eligible for a higher exemption limit of Rs 5 lakh.
The Minister estimated a net revenue loss of Rs 200 crore in the Budget. The proposal related to indirect taxes are estimated to result in a net revenue gain of Rs 11,300 crore, including Rs 4000 crore on Service Tax expansion, while the proposals on direct taxes are expected in a revenue loss of Rs 11,500 crore.
The Budget for next year pegs the fiscal deficit at 4.6 per cent of GDP for 2011-12 which works out to Rs 4,12,817 crore. Gross tax receipts are estimated at Rs 9,32,440 crore, an increase of 24.9 per cent over Budget estimates for 2010-11.
Net non-tax revenue receipts for the next financial year are estimated Rs 1,25,435 crore. The total expenditure proposed for 2011-12 is Rs 12,57,729 crore. Plan expenditure will be Rs 4,41,547 crore, an increase of 18 per cent and non-Plan expenditure will be Rs 8,16,182 crore, an increase of 10.9 per cent over Budget estimates of 2010-11.
Here are some major tax announcements:
*Tax exemption limit raised to Rs 1.8 lakh, from Rs 1.60 lakh for individual tax papers.
*For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.
*Citizens over 80 years to have exemption limit of Rs 5 lakh.
*Surcharge for companies cut to 5 per cent, from 7.5 per cent.
* A new revised income tax return form 'Sugam' to be introduced for small tax papers.
*Service tax retained at 10 per cent; duty exemptions to be withdrawn on various items.
*Net loss from direct tax proposals estimated at Rs 11,500 crore for the year.
*Excise and customs duty proposals to result in the net gain of Rs 7,300 crore.
*Standard rate of central excise (rpt) excise duty maintained at 10 per cent; No change in CENVAT rates.
*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.
*Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.
*Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.
*Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
*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.
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