Govt raises IT limit; Surcharge, FBT & CTT abolished

Govt raises IT limit; Surcharge, FBT & CTT abolished

Announcing  slew of tax sops, including an additional Rs 10,000 personal income tax exemption and scrapping of 10 per cent surcharge, the Finance minister Pranab Mukherjee has abolished the Fringe Benefit Tax and Commodities Transaction Tax.

UPA government’s first budget after a massive mandate in favour of stability and growth brought smile to every tax payer. Exemption limit in personal income tax raised by 15000 rupees for senior citizens and by 10000 rupees for other categories.

Not only that, 10 per cent surcharge on income tax has also been abolished.

Finance Minister also promised to phase out surcharges on various direct taxes and to bring out a new income tax code within next 45 days. 

Even though there is no change in corporate tax but the Finance Minister has accepted one of the main demands of the corporate sectors by abolishing Fringe Benefit tax.

Corporate India complained that this tax yielded little revenue but made life difficult because of volumes of paper work.

Commodity Exchanges will also be happy as Commodities Transaction Tax has been scrapped. Scope of services tax, on the other hand, has been extended by bringing in four new services. Legal services for the first time will be brought under service tax net.

Export sector will benefit as some of the tax on services for the sector have been removed. Stimulus packages announced for the export sector including ECGC adjustment schemes and interest subvention are to continue till March 2010. 

Finance Minister made minimum changes with indirect taxes.

However excise duty on non essential items has been increased from 4 to 8 percent.