Wednesday, March 02, 2011

Initial Brief On Budget Proposals- 2011

अगले साल के लिए वित्त मंत्री ने संसद में बजट पेश कर दिया। उम्मीदों के साथ इंतजार कर रहे कुछ लोग खुश हुए तो कुछ को निराशा हाथ लगी।

नई दिल्ली से चार्टर्ड एकाउंटेंट संदीप गोयल ने इस बजट का सारांश भेजा है। इससे बजट को अपने परिप्रेक्ष्य में समझने में आसानी रहेगी। इसे उपलब्ध कराने के लिए एनडीटीवीखबर.कॉम के संपादक विवेक रस्तोगी का हृदय से आभार...:)
---धर्मेंद्र कुमार

Initial Brief On Budget Proposals- 2011

Direct Taxes

• Exemption limit for the general category of individual taxpayers enhanced from `1,60,000 to `1,80,000 giving uniform tax relief of `2,000.

• There is no upliftment of Slab for women. It is `1,90,000/- only.

• Exemption limit enhanced to `2.50 lacs and qualifying age reduced for senior citizens to 60 yrs.

• Higher exemption limit for Very Senior Citizens, who are 80 years or above, is of `5.00 lacs.

• Section 80 CCF– Additional deduction of `20,000 for investment in long-term infrastructure bond proposed to be extended for one more year.

• Cess will be 3%. There is no change on that.

• Current surcharge of 7.5% on domestic companies proposed to be reduced to 5%.

• Rate of Minimum Alternative Tax proposed to be increased from 18% to 18.5% of book profits.

• Additional deduction of `20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year.

• Investment linked deduction to businesses developing affordable housing.


• In section 115-0, the benefit of DDT exemption to SEZ developer & SEZ units has been omitted. Now they have to pay DDT on their declared dividends.

• Special Provisions relating to certain limited Liability Partnership were added in Chapter XII – BA, the details of the same will be provided in due course.

The main impact is that it is being subject to MAT. Now there is no benefit in creating LLP.

• In section 115 – JB, Now SEZ developer & Units are no more exempted. They have to pay MAT now.

• The benefit of Section 80- IA has been extended for one more year. Please note that same will not be applicable once DTC is going to be effective.

Indirect Taxes

• To stay on course for transition to GST.

• Central Excise Duty to be maintained at standard rate of 10%.

• Reduction in number of exemptions in Central Excise rate structure.

• Nominal Central Excise Duty of 1% imposed on 130 items entering in the tax net.

• Lower rate of Central Excise Duty enhanced from 4% to 5%.

• Peak rate of Custom Duty held at its current level.

Service Tax

• Standard rate of Service Tax retained at 10%, 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 rationalized. Similar changes being carried out in Central Excise and Custom laws.

Rates of Income Tax:

In the case of every–

- Individual or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act--

Upto `1,80,000-- Nil.

`1,80,001 to `5,00,000—10%.

`5,00,001 to `8,00,000—20%.

Above `8,00,000—30%.

- Individual, being a woman resident in India, and below the age of sixty years

Upto `1,90,000-- Nil.

`1,90,001 to `5,00,000—10%.

`5,00,001 to `8,00,000—20%.

Above `8,00,000—30%

- Senior citizen individual above 60 years of age but below than 80 years

Upto `2,50,000-- Nil.

`2,50,001 to `5,00,000—10%.

`5,00,001 to `8,00,000—20%.

Above `8,00,000—30%.

- Senior citizen individual above 80 years of age

Upto `5,00,000-- Nil.

`50,00,001 to `8,00,000—20%.

Above `8,00,000—30%.

No surcharge will be levied in the above cases

Tax Reforms

• Direct Taxes Code (DTC) to be finalized 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.


• 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.

IT Initiatives

• Bill to amend the Indian Stamp Act proposed to be introduced shortly.

• A new scheme with an outlay of Rs. 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.

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