| Direct Tax |
Indirect Tax |
Tax slabs for individual taxpayers:
- Income upto Rs 1.6 lakh: Nil
- Income above Rs 1.6 lakh and upto Rs. 5 lakh: 10%
- Income above Rs.5 lakh and upto Rs. 8 lakh: 20%
- Income above Rs. 8 lakh: 30%
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Excise Duties:
- Rate reduction in Excise duties to be partially rolled back
- Excise duty on petrol and diesel enhanced by Re.1 per litre each
- Excise duty exemption is being re-introduced on tea, coffee and rubber plantation
- Excise duty cut on CFL
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| Current surcharge of 10% on domestic companies reduced to 7.5%. |
The standard rate on all non-petroleum products enhanced from 8 per cent to 10 per cent ad valorem |
| Rate of Minimum Alternate Tax (MAT) increased from the current rate of 15% to 18% of book profits. |
The ad valorem component of excise
duty on large cars, multi-utility vehicles and sports-utility vehicles increased by 2
percentage points to 22 per cent. |
| Education Cess on income-tax to continue |
Customs duties:- Customs duty on crude petroleum is being increased from Nil to 5%.
- Customs duty on serially numbered gold bars (other than tola bars) and gold coins is being increased from Rs.200 per 10 gram to Rs.300 per 10 gram.
- Customs duty on platinum is being increased from Rs.200 per 10 gram to Rs.300 per 10 gram.
- Basic customs on Rhodium – a precious metal used for polishing jewellery reduced to 2%.
- Basic customs duty is being reduced from 10% to 5% on magnetrons of upto 1,000 kw for the manufacture of microwave ovens.
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| Weighted deduction for scientific research and development increased from 150% to 200%. |
Goods imported in pre-packaged form specified goods namely, ready-made garments, mobile phones and watches are being provided an outright exemption from additional duty of customs of 4%. |
| To facilitate the conversion of small companies into Limited Liability Partnerships, transfer of assets as a result of such conversion not to be subject to capital gains tax. |
Mono Rail Projects for urban transport are being granted project imports status and attract concessional rate of 5% basic customs duty. |
| Uniform direct tax code from April 1, 2011 |
Uniform, concessional basic duty of 5%, CVD of 4% with full exemption from SAD proposed on all medical equipments |
| New corporate tax rate at 33.21% |
Full exemption from customs duty is being extended to additional specified capital goods and raw materials for the manufacture of electronic hardware. |
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Gold ore and concentrate are being fully exempted from basic customs duty and special additional duty of customs |
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Tax deductions on existing projects and relaxed norms for built-up area. |
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Service Tax:
- Service tax unchanged at 10%
- Service tax net widened
- Service tax exempted on transport of foodgrains and pulses
- Accredited news agencies exempt from service tax
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Import duty on raw materials required for the manufacture of sports goods |
| Industry |
Budget Proposal |
| Auto |
Increase of central excise duty to 10 per cent |
| IT |
MAT hike |
| Banking |
Additional banking licenses to private sector players |
| Food processing |
- Five more foodparks to be setup.
- External Commercial Borrowings to be available for cold storage or cold room facility
- Project imports status is being granted to the initial setting up or substantial expansion of, a cold storage, cold room. These projects would attract concessional rate of basic customs duty of 5%.
- Truck Refrigeration units for the manufacture of refrigerated vans/trucks are being fully exempted from basic customs duty.
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| Infrastructure |
Allocation for road transport increased by over 13 per cent |
| Energy |
- To setup Coal Regulatory Authority
- clean energy cess on coal produced in India at a nominal rate of Rs.50 per tonne to be levied
- restored the 5% duty on crude petroleum and 7.5% duty on petrol and diesel.
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| Agriculture | - Reduction in fertiliser subsidy
- farm loan payments are to be extended for six months
- Basic customs duty is being reduced from 7.5% to 5% on specified agricultural machinery
- To exempt the testing and certification of agricultural seeds from service tax.
- Basic customs duty on long pepper is being reduced from 70% to 30%.
- Basic customs duty on ‘asafoetida’ (heeng) is being reduced from 30% to 20%.
- The transportation by road of cereals, and pulses to be exempted from service tax.
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| Health |
Concession for medical equipments for hospitals retained |
| Entertainment |
Concessional customs duty of 5% for cable TV operators for importing equipment |
| Real Estate |
Tax deductions on existing projects and relaxed norms for built-up area. |
| Hotels |
To allow firms setting up new two-star and above hotels to claim investment-linked tax deduction. |
| Pharma |
weighted deduction on in-house research and development expenses was proposed to be raised to 200 percent from 150 percent |
| Industry |
Wishlist |
| Realty Sector |
- a tax holiday under Section 80-1B for affordable housing
- an upward revision to tax exemption to the extent of Rs 3 lakh on housing loan interest payment.
- tax holiday for hotels under Section 80 1D to be extended to 10 years from the present five-years
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| Retail |
- rationalise the tax structure and eliminate multiple layers of taxation
- grant industry status
- FDI in retail trading should be opened up to substantially improve productivity and distribution system through modern format retailing.
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| Hotel Sector |
- Demands infrastructure status for the hotel industry.
- Rollback of depreciation rate for hotel buildings to 20%.
- Development of infrastructure plays a very important role for tourism sector.
- Hotel companies want tax benefit to be given to the newly constructed 5 star properties
- 100% tax holiday benefit should be extended for 10 years instead of 5 years
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| Sugar |
- partially decontrol of the industry and re-introducing sugar futures trading revival of sick units through disinvestments .
- extension for income tax exemption for cogeneration projects by another 5 years i.e. upto 31st March 2015.
- cover the ethanol projects under section 80-IA of the Income Tax Act
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| FMCG |
- rapidly implement GST (Goods & Service Tax).
- Focus o rural sector for higher growths
- Enforcement of the Trade Mark and Copyright Laws
- lower the corporate taxes and personal income taxes.
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| Auto |
- stimulus for the sector should be continued
- Remove differential excise duty between small and large cars
- Extension of accelerated depreciation benefits for CV
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| Healthcare |
- Boost medical infrastructure
- incentivise for public-private partnership projects in healthcare
- extend the tax holiday announced in the previous Budget from five years to 15.
- grant 'Priority Sector' status to the sector
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| Biotech |
- import duty exemption on equipment and instrumentation
- 200 per cent weighted average tax deduction on all R & D and patenting costs
- fiscal incentives such as sales tax and excise duty exemption for a five year period from the date of commercialisation.
- adoption of Clause 10AA of the SEZ Act with retrospective effect
- concessions on cost of deregulation of GMOs (genetically modified organism) of national importance, and service tax, VAT and tax holiday.
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| Electronics |
- stable tax structure to encourage long-term investments
- Setting up of a 'National Electronics Mission' as a nodal agency in the IT department with direct access to the Prime Minister's Office.
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| Pharma |
- excise duty to be levied on 55 per cent of product value rather than the current 65 per cent
- Tax exemption to imported life saving medicines
- subsidies for filing patent applications in foreign countries
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| Food Processing Industry |
- All agricultural based products should be tax exempt or concessionally treated.
- Import of plant and machinery for food processing sector should be exempt from custom duty.
- Zero custom duty on hulled / rolled / flaked oats.
- VAT on all food products as also on packaged drinking water be at the rate of 4%
- Discriminatory tax treatment is unwarranted and ought to be removed.
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| Dairy |
- Incentivising the skimmed milk powder / full cream milk powder exports
- export of milk powder in bulk be provided duty drawback at par with casein and the like.
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| Wine industry |
- calls for a reduction of import duties and reduction in interest rates
- reduce import duties on equipment required particularly on those which are not manufactured locally
- a reduction in the interest rate on working capital from the present 12% to 5%.
- reduce the interest rate on loans on vineyards of 5% to match with international norms.
- subsidiaries to wineries exporting wines
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| Travel & Tourism |
- export status for the industry implementation of GST
- ATF to be declared under goods category
- allowing foreign airlines to make Foreign Direct Investments
- creation of National Tourism Board and a national travel mart to promote India’s offerings
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| IT |
- extension of the unexpired tax holiday period of the units located in Software Technology Parks (STPs) and Export Oriented Units (EOUs) for another 3yrs
- rollback of MAT for units operating in STPs and EOUs
- introduction of Advanced Pricing Arrangement
- Subsuming of VAT and service tax incidence to a single levy
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| Banking |
- Remove the ceiling of 7.5% of total income allowed as deduction
- Prepayment period to be extended further from December 31, 2009
- Increase the FDI limit in Insurance sector from 26% to 49%
- Reintroduce 10 (23) G of the Income Tax act Reduce from five year lock-in period to three years.
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| Construction |
- Enable easier lending to the infrastructure sector by reintroducing section 10 (23)(g)
- Extend the 10 year income tax holiday by another 15 years
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| Oil & Gas |
- Extend tax holiday to the 10 years out of 15 year Service tax Exemption on input services on exploration
- Allow marketing companies to determine retail fuel prices
- APM gas should be sold at market rates
- Abolition of MAT on Exploration & Production companies
- Declared goods status to natural gas
- Reduce sales tax i.e. up to 20% in various states to uniform 4%
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| Textile |
- Excise duty on PTA, MEG, polyester chips, POY To be maintained at 8%
- 2% Interest subvention Extend by one year as it expires on 31st March 2010
- Increase DEPB benefits
- Allow TUF for manmade fibres
- Increase allocation under TUF
- Cash refund of CENVAT credit
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| Cement |
- No increase in excise duty
- 55% abatement on excise duty as against no abatement allowed currently
- Abolish import duty on coal and pet coke as against current 5%
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