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Indian Budget 2011 Highlights

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Finance Minister has started presenting his sixth Budget in the Lok Sabha. The Highlights of the federal budget 2011 are follows:-

money-budget-taxes

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Highlights

  • Service tax to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor.
  • Air-conditioned hospitals with more than 25 beds come under service tax regime.
  • More services to will come into service tax net.
  • Ship owners can import spare parts duty-free.
  • Service tax raised on air travel.
  • Basic customs duty on agricultural machinery reduced to 4.5% from 5%.
  • Customs duty on raw silk reduced from 30% to 5%.
  • Import duty on gypsum and coal increased from 5% to 2.5%.
  • No new tax exemption limit for women.
  • Stainless steel exempted from excise customs duty.
  • Cut in excise duty of hybrid fuel, yarn, steel
  • Direct transfer of fuel cash subsidy to people below poverty
  • Export duty at 20% for iron ore.
  • Customs duty on Pet Coke and Gypsum to be reduced to 2.5%.
  • Base rate on excise duty raised to 5% from 4%
  • 1% Excise duty on 130 new items
  • Excise tax reduced from 10% to 1%.
  • CENVAT rates unchanged.
  • Mandatory levy of 10% on branded garments.
  • Foreign unit dividend tax rate cut to 15% for Indian companies
  • Service tax retained at 10%
  • Exemption for investment in infra debt funds for another year.
  • Central excise duty rate unchanged at 10%
  • New category for 80yrs. and above, limit is Rs 5 lakh
  • MAT increased to 18.5 %.
  • Surcharge brought down from 7.5% to 5% for companies.
  • Tax Exemption limit raised from Rs1.6 lakh to Rs 1.8 lakh.
  • Qualifying age of senior citizens reduces from 65 to 60 years.
  • New series of coins with new rupee symbol to be introduced.
  • Relaxation in e-filing norms for small tax payers
  • Rs 9 lakh compensation to be given to men of defense and Central paramilitary forces for permanent disability and discharged from service.
  • Award to be introduced in the name of Rabindranath Tagore with cash prize of 1 cr, to promote international brotherhood.
  • 50 More Mega Food Parks to be set up.
  • Plans to create 150lac metric tons food storage capacity.
  • Increased pension of Rs 500 pension for those above 80 years.
  • Pension eligibility reduced from 65 years to 60 years for BPL.
  • Rural broadband connectivity to be provided in 3 years.
  • 1% interest subvention on home loans upto 15 lakh.
  • New Scholarships for 40 lakh needy SC/ST students of Class 9/10.
  • To create Rs 100cr equity fund for microfinance companies
  • Fertilizer sector investment gets Infra status.
  • New scheme to be introduced for refund of service tax
  • Interest subvention scheme on short term farm loans at 7% interest to continue.
  • Banks will step up direct lending to farmers
  • Home Loan Limit Hiked to 25 lakh for priority sector lending
  • A women’s self help group to be set up with a corpus of Rs 500cr.
  • RBI will issue new banking guidelines this financial year.
  • Registered FII’s to participate in Indian MF industry.
  • NRI’s can invest in mutual funds from now.
  • FII limit in corporate bonds in infra increased by additional $20bn.
  • FII’s allowed to invest in unlisted bonds
  • FIIs can now invest in mutual funds schemes
  • Infra sector FII cap for bonds with 5-year residual maturity.
  • SEBI registered mutual funds to accept subscription from foreign investors.
  • SEBI registered mutual funds now accessible to foreign investors (after fulfilling KYC norms)
  • Duty on hybrid and electric cars, and batteries imported for them will reduce.
  • Indian rupee symbol will be introduced on keyboards in Unicode.
  • Plan to roll out e-stamping in all states in three years.
  • Vocational education to improve employability of young people.
  • Mega power projects will be set up by this year.
  • Plans to encourage organic farming.
  • Support for production of nutritious cereals like bajra, jowar, ragi.
  • More loans for minorities

Direct Taxes

  • Senior citizen benefits to begin at 60 instead of 65.
  • Personal Tax exemption limit raised from Rs 1.6 lakh to Rs 1.8 lakh.
  • Process of service tax refunds will be simplified soon
  • New category for 80 yrs. and above, limit is Rs 5 lakh.

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