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Key Highlights of Union Budget 2010-11

Economy

  • Business sentiment weak at the time of last Budget
  • Averted crisis, Indian economy far better situation
  • Short-term global outlook bleak during FY10 Budget
  • Need to make recovery broad based in coming months
  • Economy can achieve 10% GDP growth
  • Indian economy is in a far better situation.
  • Need to review stimulus, go back to fiscal prudence
  • To follow calibrated exit strategy
  • First challenge is to get to the high GDP growth path
  • Efforts to lower inflation in next 2 months
  • GDP rebounded in Q2FY10
  • Renewed momentum in MFG led recovery
  • High fuel prices added to inflationary pressures
  • Q3 GDP at 6% Vs 7.9% (QoQ) – expectation was 7.2%
  • Apr 09 –Dec 09  GDP at 6.7% vs 7.1%
  • Manufacturing Output up 14.3% vs 1.3%(YoY)
  • Agriculture Output at -2.8% vs -1.4%(YoY)
  • Construction output up 8.7% vs 3% (YoY)
  • Divestment target of 25000 Crs in FY10 & Rs.40,000 Crs in FY11.
  • Focus to improve food security and health care systems
  • Emergence of double digit food inflation a concern
  • $20.9 bn FDI inflows during Apr-Dec '09
  • Fiscal deficit revised to 6.9% in FY10.
  • Rolling targets of fiscal deficit at 4.8% in 2011-12 and 4.1% in 2012-13
  • 15% increase in plan expenditure and 6% in non-plan expenditure
  • Fy11 Net market borrowing pegged at 3.45 lakh cr

Financial Services Sector

  • RBI mulling over giving banking liscense to pvt players, nbfcs
  • Sets aside Rs 16500 cr for PSU banks to get minimum 8% tier 1 capital by March 2011
  • Repayment tenure for farmer loans extended by 6 months to June 30th 2011

Infrastructure

  • Road transportation kitty increased 13% to Rs 19894 cr
  • Budget allocates 1.73 lakh cr for infrastructure
  • Govt allocates Rs 16500 cr for railways
  • Delhi-Mumbai industrial corridor taken up for development
  • To set up 5 more mega food park projects
  • More than doubled the allocation to power sector
  • Government  to set up coal regulatory authority
  • To establish  national clean energy fund
  • Propose to hike allotment for renewable energy by 61%
  • Funds for power allocation raised from Rs 2232 cr to Rs 5132 cr
  • Govt to have a coal regulator for allocation of coal blocks
  • Govt to facilitate 20000 MMW of solar power by 2022
  • 44% of total plan outlay allocated to infrastructure.
  • IIFCL  to double refinancing to banks for infra
  • Allocation for urban development up 75% from Rs 3062 cr to Rs 5400 cr

Taxation

  • Government in position to implement direct tax code and GST from April 1 2011
  • Deduction of Rs 20000 on investment in infra bonds
  • Change in TDS threshold limits
  • Interest rate on TDS hike to 18% from existing 12%
  • Change in slabs for Tax Audit
  • Weighted deduction on R&D raised to 200% from 150%
  • No tax on Income up to Rs 1.6 lacs
  • Current surcharge on companies reduced to 7.5%
  • Minimum Alternate tax hiked to 18%
  • 30% tax on income above Rs 8 lacs
  • 20% tax on income between Rs 5 lacs to 8 lacs
  • 10% tax on income between Rs 1.6 lacs to 5 lacs
  • IT tax slabs broadened
  • IT dept to notify Saral 2 form for individual tax payers
  • New Corporate Tax Rate at 33.21%
  • Online news agencies to attract service tax
  • Service Tax rates unchanged
  • Account auditing for all income above Rs 15 lacs
  • More services to be brought under tax net
  • Rationalisation of customs duty on gaming software
  • Toys exempted from excise duty, to become cheaper
  • Jewellery to be more expensive
  • Monorail granted project import status
  • CDs to be cheaper
  • Excise duty on CFL halved to 4%
  • Refrigerators to be costlier
  • Customs duty on Gold and Platinum hiked
  • Televisions to be costlier
  • Mobile phones to become cheaper
  • Peak customs duty unchanged at 10%
  • Cement to be costlier
  • Air conditioners to be costlier
  • Excise on all non smoking tobacco raised
  • 7.5% duty on petrol and diesel restored
  • 5% duty on crude petroleum restored
  • Fuel prices likely to go up
  • Excise duty on petrol and diesel raised to Rs 1/litre
  • Cigarettes to be costlier
  • Excise on large cars,SUVs, MUV raised to 22%
  • Partial rollback in Excise Duty from 10% to 8%
  • Excise on large cars,SUVs, MUV raised to 22%
  • Presumptive tax limit raised to Rs 60 lacs
  • Investment linked deduction benefit for 2 Star hotels 

Published by

SANDEEP JOSHI
(c a)
Category Income Tax   Report

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