BUDGET 2011-2012

Ashish Bansal

• A miniscule hike of Rs 20,000 in the exemption limit for tax payers has been introduced.

• The older citizens can feel happy as the finance minister has decrease the income tax "senior citizen" definition from age 65 to age 60.

• For those who survive all the hardships of life and live to be over 80 they get a higher limit!!

• Deduction of Rs 20,000 for infrastructure bonds has been retained.

Income Tax

Mobile phones to be costlier

However, mobile handset prices will become more expensive as Finance Minister Pranab Mukherjee on Monday announced one per cent hike in the Central Excise duty for 130 items, including phones.

Comeing April 1 and central excise duty on mobile phones will be raised from the current four per cent to five per cent.

Steel

Steel prices to come down.

Items that will become cheaper also include solar lanterns.

Cars

• Cars could either cost less or their prices might remain the same as the finance minister has not made any change in excise duty rates.

  

Hybrid cars• Duty reduced on hybrid & electric cars

along with batteries imported for such vehicles.

Jewellery• Precious stones, gold and silver jewellery

to be exempted from central excise duty.

• However,  labelled jewellery will burn a deeper hole in the pockets as they will now attract one per cent excise duty.

• LEDs

• LEDs (light-emitting diodes) to cost less. Perhaps some electronic goods that require LEDs will cost less.

  • Raw silk• Basic customs duty on raw silk reduced from 30 to 5

per cent.  • Duties on parts will make pc costlier . • Farm equipment• Basic customs duty on agricultural machinery reduced

to 4.5 per cent from 5 per cent.

Hotel accommodation

• Service tax on hotel accommodation above Rs 1,500 per day.

• Hotel stay will also become more expensive as rooms with a tariff of more than Rs 1,000 a day will attract an effective service tax of 5 per cent.

Branded clothes

• Branded clothes readymade garments will also become expensive as they will attract 10 per cent excise duty.

Air travel

• The Budget also proposed to raise service tax on air travel by Rs 50 in the case of domestic air travel and Rs 250 on international flight by economy class.

• Moreover, higher class travel in domestic sector will attract a service tax rate of 10 per cent bringing it on par with journeys by higher classes on international air travel.

Big hospitals

• With the finance minister proposing changes in service tax band, treatment in air-conditioned private hospitals, air travel and lawyer fees will cost more henceforth.

• The government has proposed to put all forms of payments -- by individuals, insurance firms and business houses, for treatment in private hospitals with more that 25 beds and air conditioning facility under the service tax net resulting in an effective tax of five per cent.

  Health check-ups• Service tax net extended to include health check-

ups.

Legal cases

• Legal cases will also become a costly affair with Mukherjee proposing to cover all legal consultations, except individual to individual, under the service tax net.

Liquor in chic restaurants 

• Drinking liquor in air-conditioned restaurants will also be more expensive as it will now come under the service tax net.

Ketchups, soups, etc 

The proposals made by Finance Minister Pranab Mukherjee also mean that ready-to-eat food items, such as ketchups, soups, mudis (puffed rice), coffee and tea mixes, flavoured milk, supari will be dearer as they will now attract higher excise duty.

Selling off PSUs Continuing the focus on divesting

government stakes in public sector undertakings, the finance minister has proposed to look at raising Rs 40,000 crore (Rs 400 billion) from divestment in 11-12.

Notebooks, text books

• According to the budgetary proposals, notebooks and exercise books, which were earlier exempted from excise duty will now attract one per cent duty without CENVAT credit facility. Moreover, a general effective rate of 5 per cent has been prescribed for these items and facilities.

• Similarly, fountain pen ink, ball pen ink, geometry boxes, colour boxes and pencil sharpeners will also now attract a similar levy.

• Educational text books are also expected to become costlier as paper used in printing them will no longer be exempted from excise duty.

Vaccines 

Vaccines, other than those included in National Immunization Programme, will also register an increase as they will attract a concessional duty of one per cent without CENVAT credit facility.

Coal Red hot coal may push up cement and

steel prices (CIL Coal India).

Agriculture

Higher allotment under Rashtriya Krishi Vikas Yojana of Rs 7,860 crore could see more support for the agriculture sector.

Special focus on vegetables in the form of Rs 300 crore for Vegetable initiative. Agriculture credit too raised to Rs 475,000 crore.

Happier farmers could mean lower prices for the common man. Focus on cold chains and storage could also lead to efficiency and in return reduction in prices and better quality vegetables reaching our kitchens.

The Budget has made some items,

including raw materials for syringe and needles, mobile parts and accessories like hands free headphones, incense sticks, sanitary nakpins and diapers, cheaper by reducing taxes.

Rail Budget 2011

No hike in fares, E-booking charges reducedMamata Banerjee has announced that there will ne no hike in passenger fares.

However, an added announcement declared a reduction in E-booking charges.

The booking charges have been reduced by Rs 10 for AC and Rs 5 for non AC. Common Man Budget".

Common Man Budget

New trains introduced by Mamta9 new Duronto trains, 3 Shatabdi's and 56 super Fast trains are set to run on tracks. Following is the summary of new trains introduced .

9 Duronto Trains : Allahabad-Mumbai, Madurai-Chennai, Chennai-Thiruvananthapuram, Pune-Ahmedabad, Sealdah-Puri, and Mumbai Central-New Delhi routes (Non AC), Allahabad-Mumbai, Sealdah-Puri, Mumbai Central-New Delhi, Ahmedabad-Rohtak (AC).3 Shatabdi Trains : Pune-Secunderabad, Jaipur-Agra and Ludhiana-Delhi.56 Express Trains2 AC Double Decker Trains : Jaipur-Delhi and Ahmedabad-Mumbai routes.Special trains on Vivekanad and Tagore anniversaries.

New Smart Card for long distance travel

While presenting the Rail Budget 2011, Mamta introduced a new concept of Smart Card - "Go India" for long distance travel by Indian railways. The all new concept is expected to benefit passengers traveling long distance by cutting down their time and cost of buying multiple tickets.

Go

India

Impetus

The main impetus of the Budget is to improve the growth rate and get it to 9 percent in the near term and to a double digit rate in the medium to longer term.

The other two areas of focus are infrastructure development, especially in rural India, and improving governance by shoring up systems and bringing stricter control on institutions.

Key points of the budget: The government is very keen on ensuring that inflation is curbed and food security is ensured for all citizens.

Infrastructure A main Focus

Rs 214,000 crore has been allotted for infrastructure for 2011-12. An increase of over 23% over the last year.

We can see better highways and transport systems in the near future which could lead to reduction in inflation in the longer term.

Bring the black money back

As expected the finance minister has taken note of the hue and cry over black money.

Many new initiatives have been mooted to bring back black money in circulation.

Questions?

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