FM revises income tax rates; to give more money to consumers

FM revises income tax rates; to give more money to consumers

In a relief to individual tax payers, the government on Friday changed the slabs cutting the rate to 10 percent for income up to Rs 5 lakh, while leaving the threshold limit for tax-free income unchanged at Rs 1.6 lakh. 

In the revised tax slab there will be no tax till Rs 1.6 Lakh.

For Income between Rs 1.6 Lakh to Rs 5 Lakh it will attract 10 percent tax limit.

For income between Rs 5 lakh and 8 lakh, 20 perecnt tax rate will be applicable.

For Income above Rs 8 Lakh a rate of 30 percent will be levied.

The tax concessions would put more money in the hands of Consumers.

In a fillip to savings, deduction of additional amount of Rs 20,000 in long term infrastructure bonds over existing limit of one Lakh will also be allowed.

Income Tax Surcharge has been reduced to 7.5 percent on domestic companies.

However the Minimum Alternative Tax MAT has been increased to 18 percent.

In a relief to small businessmen and professionals audit limits have been increased.

While for businessmen it has been hiked to Rs 60 lakh for professionals it has been hiked to Rs 15 lakh.

Presumptive taxation limit for small businessmen has also been hiked to Rs 60 Lakh.

A Simple two page SARAL –II form for individual salaried tax payers for the coming assessment year will be introduced.

Excise / Custom Front

Union Finance Minister also announced implementation of single goods and Services Tax GST rollout by April 2011.

On the excise front Pranab Mukherjee announced a partial rollback of fiscal stimulus package.

He proposed enhancement of central excise tax to 10 percent on non petroleum products.

Excise duty of One rupee per litre has been levied on petrol and diesel.

Basic duty of five percent has been levied on crude oil while 7.5 percent rate will be applicable on diesel and petrol.

Other refined products will attract 10 percent custom duty While Ad valorem component of excise duty on large cars, MUVs and SUVs has been increased by 2 percent to 22 percent, for toy ballons excise duty has been exempted.

Structural changes with some increase in excise rates on cigarettes and cigars has been proposed.

Excise duty on all non smoking tobacco will also be enhanced.

Project import status will be granted to Monorails projects for urban transport at an concessional custom duty of 5 percent.

Duty Exemptions for domestic production of mobiles and accessories has been extended to parts of battery chargers and hands free headphones.

In a simplification of duties levied on medical instruments and appliances , Finance Minister has proposed a concessional and simplified 5 percent duty on such equipments.

Concessional custom duty of 5 percent duty has been proposed for Digital Head End equipments for fillip to digital cable distribution.

While Customs duty on gold , silver and platinum has been hiked.

For Rhodium, microwave components it has been reduced.

Customs limit for personal baggage has been hiked to Rs 3 Lakh.

Service Tax To maintain growth momentum and bring about a convergence in the rates of tax on goods and services, Pranab Mukherjee retained the 10 percent service tax rate.

Accredited News Agencies who meet certain criteria have been exempted from service tax net.

Agriculture & power Taxation 

Series of excise, Customs and Service Tax concessions have been proposed to boost agriculture storage, production and food processing.

Project import status with concessional 5 percent duty has been given for setting up mechanized handling systems in warehouses, cold storages, processing units.

Full service tax exemption for installation and commissioning of such equipments has also been provided. 

Full exemption from customs duty to refrigeration units for manufacturing of refrigerated vans and trucks has been provided. 

Concessional 5 percent customs duty for specified agricultural machinery and excise exemption for preservation, storage & processing of agriculture has been proposed. 

Transporation of cereals and pulses have been exempted from the ambit of service tax.  

To give boost to clean and renewable energy sources, budget proposes to levy a clean energy cess on coal produced in India at a rate of 50 Rupees per tonne.  

Concessional 5 percent customs duty during initial setting up of photovoltaic and solar generating units machinery has been proposed.

Wind energy rotor blades have been exempted from excise.

LED lights to attract minimal 4 percent excise. 

Environmental friendly rickshaw named Soleckshaw to be under concessional 4 percent excise duty. 

Total expenditure in 2010-11 pegged at Rs 11, 08,749 crore, Net revenue gained from Direct and Indirect tax has been put at Rs 20,500 crore.

Fiscal deficit is projected at 5.5 percent while revenue deficit has beenput at 4 percent.