DIRECT TAXES
I-T exemption limit lowered
The exemption limit for the general category of individual taxpayers is proposed to be enhanced from Rs 1,80,000 to Rs 2,00,000, giving a tax relief of Rs 2,000. The upper limit of the 20 per cent tax slab is proposed to be raised from Rs 8,00,000 to Rs 10,00,000.
Deduction for bank interest
Individual tax payers are proposed to be allowed a deduction of up to Rs 10,000 for interest from savings bank accounts. A deduction of up to Rs 5,000 is proposed to be allowed for preventive health check-ups.
Tax concession for senior citizens
Senior citizens not having income from business are proposed to be exempted from payment of advance tax.
Withholding tax on ECB interest cut
To provide low-cost funds to stressed infrastructure sectors, the rate of withholding tax on interest payment on ECBs is proposed to be reduced from 20 per cent to five per cent for three years for certain sectors.
Restrictions on VC funds removed
Restriction on Venture Capital Funds to invest in only nine specified sectors proposed to be removed.
Dividends from foreign subsidiaries
Proposal to continue to allow repatriation of dividends from foreign subsidiaries of Indian companies at a lower tax rate of 15 per cent up to March 31, 2013.
Capex-linked deduction enhanced
An investment-linked deduction of capital expenditure for certain businesses is proposed to be provided at the enhanced rate of 150 per cent. New sectors are to be added for the purposes of investment-linked deduction.
Deduction for R&D spend extended
The weighted deduction of 200 per cent for R&D expenditure in an in-house facility is proposed to be extended for a further period of five years beyond 31 March, 2012.
Tax shelter for farm extension
A weighted deduction of 150 per cent on expenditure incurred on agri-extension services is proposed.
Concession for power sector
The sunset date for setting up power sector undertakings is to be extended by a year for claiming 100 per cent deduction of profits for 10 years.
Turnover limit for SME audit raised
The turnover limit for compulsory tax audit of account and presumptive taxation of SMEs is proposed to be raised from Rs 60,00,000 to Rs 1 crore.
Tax concession for skill building
A weighted deduction of 150 per cent of expenditure incurred on skill development is proposed to be provided in the manufacturing sector.
STT cut by 20%
The securities transaction tax is to be reduced by 20 per cent on cash delivery transactions.
MAT coverage extended
The levy of Minimum Alternate Tax is proposed to be extended to all persons, other than companies, who claim profit-linked deductions.
INDIRECT TAXES
All services barring 17 to be taxed
All services are proposed to be taxed, except those in a negative list comprising 17 heads. However, an exemption from this tax is proposed for some sectors.
Service tax rate hiked to 12%
To maintain a healthy fiscal situation, a proposal to raise service tax rate from 10 per cent to 12 per cent, with corresponding changes in rates for individual services.
Excise duty raised to 12%
The standard rate of excise duty is to be raised from 10 per cent to 12 per cent, the merit rate from five per cent to six per cent and the lower merit rate from one per cent to two per cent, with a few exemptions.
Duty on farm equipment cut
The basic customs duty has been reduced for certain agricultural equipment and their parts, while full exemption from basic customs duty has been proposed for import of equipment for expansion or setting up of fertiliser projects up to March 31, 2015.
INDIRECT TAXES
Excise on big cars to go up
Excise duty on large cars is proposed to be enhanced.
Duty on gold hiked
The basic customs duty on imports of gold and other precious metals is to be increased. Levy of excise duty of 1 per cent on branded precious metal jewellery is to be extended to include unbranded jewellery. Branded silver jewellery is being exempted from excise duty.
Coal mining equipment is duty-free
Full exemption from basic customs duty has been proposed for coal mining project imports. Also, basic custom duty is proposed to be reduced for machinery and instruments needed for surveying and prospecting for minerals.
Duty cut on railway equipment
Basic custom duty is to be reduced for equipment required for installation of train protection and warning systems and upgradation of tracks for high-speed trains.
Road-building machines duty-free
Certain categories of specified equipment needed for road construction, tunnel boring machines and parts of their assembly will be fully exempt from import duty.
Tax concessions for MRO services
Tax concessions proposed for parts of aircraft and testing equipment for maintenance, repair and overhaul of civilian aircraft.
Relief for manufacturing units
Relief is proposed to be extended to sectors such as steel, textiles, branded ready-made garments, low-cost medical devices, labour-intensive sectors producing items of mass consumption and matches produced by semi-mechanised units.
Lower excise on soya products
Basic customs duty and excise duty are to be reduced on soya products to address protein deficiency among women and children. Basic customs duty and excise duty are also being reduced on iodine, while basic customs duty is being reduced on probiotics.
Concessions for green devices
Concessions and exemptions proposed for encouraging the consumption of energy-saving devices, plant and equipment needed for solar thermal projects. Concession from basic customs duty and special CVD is being extended to certain items imported for manufacture of hybrid or electric vehicle and battery packs for such vehicles.
Excise on cigarettes to go up
Excise duty on ‘demerit’ goods such as certain cigarettes, hand-rolled bidis, paan masala, gutkha, chewing tobacco, unmanufactured tobacco and zarda scented tobacco is to be increased.
Duty on imported SUVs up
The basic customs duty is proposed to be enhanced for certain categories of completely built units of large cars/MUVs/SUVs.
