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INDIAN UNION BUDGET
2011-2012
Highlights
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Dearer
-Legal Services
-Healthcare in
top – end Pvt.
hospitals.
-Branded
Cloths
-Gold
-A/c restaurants
serving Liquor
-Hotel Services
-Printers
-Paper
-Soap
-Steel
-Diapers &
Sanitary napkins
-Homoeopathic
Medicines
-Yarn/raw silk
-Mobile Phones
-Agarbatti
-Solar Lantern,
LED Lights
-Battery DrivenVehicles
-Agriculture
machinery
Cheaper
DIRECT TAXES
Corporate tax
 The Direct Taxes Code is likely to be effective from 1 April 2012
 The Corporate tax,Firms,Local authority, Co operative Societies rate
remains unchanged
 The basic rate of MAT increased to 18.5% from 18 %
 The surcharge for domestic companies reduced to 5% from 7.5 %
 The surcharge Non domestic companies reduced to 2 % from 2.5 %
 NEW INCOME-TAX return form called Sugam to be introduced for small
business.
 Salary earners having an income of less than ` 5 lakh is exempted for filing
income tax return from this year.
 Provision for tax-free infrastructure bonds extended by 1more year
 TAX HOLIDAY for IT companies finally ends Levy MAT on developers of
SEZ and units operating in them.
 Levy Alternative Minimum Tax (AMT) in the case of Limited Liability
partnerships at 18.5%
 Money market and debt funds will pay a higher dividend Distribution tax
(DDT) for investment made by firms.
 DDT will rise to 30% from 25% but stay unchanged at 12% for individual
investors.
 The TDS structure & rates remains unchanged
 Above rules are made effective from 01.04.2011
Personal Taxation
 For MEN
Current Slabs (`)
Upto160,000
160,001to500,000
500,001to800,000
Above800,001
Proposed Slabs (`)
Upto180,000
180,001to500,000
500,001to800,000
Above800,001
For WOMEN
No change in tax Structure
Upto190,000
Upto190,000
190,001to500,000
190,001to500,000
500,001to800,000
500,001to 800,000
Above800,000
Above800,000
Basic rate of tax
Nil
10%
20%
30%
Nil
10%
20%
30%
For Senior Citizen (60-80years)
Age for eligibility reduced from 65 years to 60 Years
Upto 240,000
240,001to500,000
500,001to800,000
Above800,001
Upto 250,000
250,001to500,000
500,001to800,000
Above 800,001
Nil
10%
20%
30%
For Senior Citizen (80years & above)
Hike in exemption limit to ` 5 lakh will result on big gains
Upto 240,000
240,001to500,000
500,001to800,000
Above 800,001
Upto 500,000
500,001to800,000
Above 800,001
Nil
10%
20%
30%
INDIRECT TAXES
Central excise
 Central Excise Duty to be maintained as 10% only (un changed)
 Nominal Central Excise Duty of 1 % without Cenvat credit facility is being
imposed on 130 items entering in the tax net.
 Lower rate of Central Excise Duty enhanced from 4 % to 5 %
 Optional levy on branded garments or made up proposed to be converted
into a mandatory levy at unified rate of 10 per cent.
 Labelled jewellery and Precious metals attract 1% excise duty.
 Excise duty on sanitary napkin, baby & clinical diapers and adult diapers is
being reduced from 10% to 1% with no cenvat credit.
 Concessional rate of excise duty for Hydrogen / hybrid vehicle.
 Exemption withdrawn on HD drive, CD/DVD drive,& writers, Flash memory,
Combo drives meant for fit inside of CPU or Laptop will attract 5% of
concessional excise duty .
Changes come into effect immediately unless otherwise specified.
Service tax
 Service tax rate remains unchanged at 10 percent as a pre-cursor to GST
 Legal Cases will also become a costly affair to cover all legal consultations,
except individual to individual ,under service tax net.
 Hotel accommodation in excess of ` 1,000 per day will come under the
ambit of tax ,although there will be an abatement of 50%
 service provided by air conditioned restaurants that have license to serve
liquor added as new services for levying Service Tax at 3- 5%. After an
abatement of 70%
 Tax on all services provided by hospitals with 25 or more beds with facility
of central air conditioning at the rate of 5%
 Service Tax on air travel raised from ` 100 to ` 150 in the case of domestic
air travel and ` 500 to ` 750 on international journeys by economy class.
 The domestic air travel on higher classes will be taxed at the standard rate
of 10%
 Services provided by life insurance companies in the area of investment
and some more legal services proposed to be brought into tax net.
 Above rules are made effective from 01.04.2011
Customs duty
 Basic customs duty on agricultural machinery reduced to 4.5 per cent from
5 per cent
 Basic customs duty on raw silk reduced from 30 to 5 per cent.
 Basic customs duty on solar lantern or lamps reduced from 10 to 5%
 CVD exempted fully on LEDs used for manf of LEDs light & fixtures.
 Fully exemption from basic custom duty is being extended battery charger,
hands free, head phones and PC connectivity cable of mobile handset
including cellular phones.
 Basic customs duty on bamboo used for manf of agarbattis is being reduced
from 30% to 10%
 The government has added a fixed excise duty of ` 160 per tonne on
cement and reduced custom duty on petcoke and gypsum, key inputs for
the sector.
 Changes come into effect immediately unless otherwise specified.
Goods and service tax
 GST proposed to be rolled out from April 2012
 Several proposals under the existing tax regime should facilitate a move to
wards GST:
 Focus on building robust IT infrastructure
 Further rationalization of rates under Excise and Customs

 No Changes in CST act 1956
Central sales tax
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