Budget 2011-12 presented by Finance Minister Pranab Mukherjee on 28.02.2011

Budget 2011Highlights

Budget Estimates 2011-12

Gross Tax Receipts                          Rs 9,32,440 crore

Non Tax Revenue Receipts             Rs 1,25,435 crore 

Total expenditure                             Rs 12,57,729 crore

Plan Expenditure                             Rs 4,41,547 crore 

Non Plan Expenditure                     Rs 8,16,182 crore  

The fiscal deficit of 4.6 per cent of GDP in 2011-12 works out to Rs 4,12,817 crore 

The Central Government debt as a proportion of GDP is estimated at 44.2 per cent for 2011-12  

Direct Tax - Personal Taxation

1)Tax exemption limit raised to Rs 1.8 lakh, from Rs 1.60 lakh for individual tax papers.(for resident women below the age of 60 years exemption limit retained at Rs1.90 lakhs.

2)For "senior citizens", the qualifying age reduced from 65 to 60 years and exemption limit raised to Rs 2.50 lakh from Rs 2.4 lakh

3)For "Very Senior Citizens" over 80 years the basic limit raised to Rs 5 Lakhs 

4)Deduction in addition to limit of INR 100,000 specified u/s 80CCE available to employees in respect of contributions (upto 10% of salary) made to notified Pension Scheme by the govt or any other employer 

4) Certain category of salaried taxpayers will not be required to file their income tax return

That is,The Board (Central Boards of Direct Taxes) shall soon notify a category of salaried taxpayers who will not be required to file a return of income as their tax liability has been discharged by their employer through deduction at source(TDS)

 

 Direct Tax - Corporate Tax

• Corporate tax retained at 30% for domestic companies earning total income of over Rs 1 crore a year. 

• Surcharge on domestic companies reduced to 5% from 7.5% .Surcharge on foreign companies reduced from 2.5% to 2%

• Weighted deduction for contributions made to national laboratory or a university or IIT or a specified person for scientific research, increased to 200%.

•  Minimum Alternate Tax (MAT)increased to 18.5 % from 18% on book profits

•   15 % tax on dividends received by an Indian company from its foreign subsidiary 

• Due date for filing the return of income by a company which is required to report its international transactions in Form 3CEB is extended to 30 November 

• Rate of tax on income distributed by mutual funds (other than equity oriented funds) to a person other than individual or HUF, increased to 30% (plus applicable surcharge and cess).

Indirect Taxes 

• Peak rate of duty maintained at 10%. Basic duty rate increased from 4% to 5% to align with state VAT rates

• Interest rate for delayed payment of duty increased from 13% to 18% with effect from 1 April 2011 and penalty provisions amended

  
  
• Definition of capital goods amended to include goods used outside the factory for generation of electricity for captive use
• Input and input services redefined to exclude specified goods and services  
• Ready-made garments and made-ups of textiles  mandatory levy at a unified rate of 10 %from optional levy(apply only to branded garments or made-ups)

• Service tax  

  No change in the effective service tax rate of 10.3% 

  Service tax extended to services by air conditioned restaurants having liquor license and to short term accommodation in hotels

  Scope of seven existing service categories expanded,including life insurance service, legal service, health service and commercial training and coaching service

  Interest for delayed payment of service tax increased to 18% a year and penalty provisions amended

   Budget 2011-12 lets down common man
  Budget 2011-12 has let down the common man's expectation of some reliefs from inflation/rising prices.This is so because -
  Peak rate of duty maintained at 10%(which could have been reduced on items of mass consumption)
  Basic duty rate increased from 4% to 5% to align with state VAT rates, which has inflationary effect.
  Also an increase in excise duty by 1% without Cenvat facility has been proposed on about 130 items such as processed foodstuff, textile goods, drugs, medical equipment etc. used by the masses which could have avoided   
• Pegging subsidies lower than the previous year's budgeted amount may be unrealistic given the rise in international petroleum prices and with the CG  bound to increase the prices of petroleum products at regular intervals, further escalating inflation     
•