Asia Bizz: On March 16, the Indian finance minister Pranab Mukherjee started off his 2012 Union Budget speech with many promises, but at the end of it, the minister failed to give any idea on any roadmap about the reform process as well as plans to revive the economy.
In case you missed the Union Budget 2012, we have some of the highlights here:
Mukherjee did not give any indications on the implementing goods and the service tax, or even on the subsidy cuts; but the Direct Tax Code has been deferred in Mukherjee’s budget.
The service tax has been widened for all but 17 services so as to lure the investors to put money in the equity markets.
50 percent deduction has been allowed on short term capital gains tax for the new investors up to Rs 5 lakhs.
Strict measures have been announced for the tax evasion through the PAN card and will also bring the white paper on black money in the current session of Parliament. It has also been said that it will now be mandatory to declare the assets held abroad.
Mujherjee has also announced major sops for the rural people, farmers, aviation and the power sector and increased the exemption limit by Rs 20,000. The service tax and the standard excise duty has been increased by 2 percent.
The customs duty on the large cars like the SUVs and MUVs of value exceeding Rs 20 lakhs has been raised.
The direct tax proposal in the Budget will result in a loss of Rs 4,500 crore. On the other hand the indirect proposals will result in a gain of Rs 45,940. The tax proposals thus lead to a net gain of Rs 41, 440 crores.
The Budget 2012 has also made provisions of Rs 1,93, 407 crore for the defence services including Rs 79, 579 for the capital expenditure. Mukherjee said that the allocation is based on the present needs and the further requirement would be met.
The individual’s income of up to 2 lakh will be free from income tax as against Rs 1.80 lakh earlier. Income between two lakh and Rs 5 lakh will be taxed at the rate of ten percent, 20 percent for income between 5 lakh and ten lakh and 30 percent for income above ten lakh. Even senor citizens who do not have any income through business are proposed to be exempted from payment of advance tax which will be helpful in reducing their compliance burden.
For the India traveler, duty free baggage allowance for ‘People of Indian Origin’ has been increased from INR 25,000 to INR 35,00, and for children up to 10 years, the raise has been from Rs 12,000 to Rs 15,000.
Branded silver jewellery has been exempted from Excise Duty, while customs duty for gold bars, coins falling in certain categories, platinum and gold ore, as well coloured gem stones are going to face an increase in custom duty.