7/29/2019 The Grand Presentation on BUDGET
1/60
7/29/2019 The Grand Presentation on BUDGET
2/60
7/29/2019 The Grand Presentation on BUDGET
3/60
HIGHLIGHTS
Exemption limit for general tax payersraised to Rs 1,80,000
Age criterion for senior citizens to berelaxed from 65 years to 60 years.
Senior citizen=2,50,000(age 60 years)
Super senior citizen :(80years) 5,00,000
7/29/2019 The Grand Presentation on BUDGET
4/60
. . . continue
Female : existing limit of 1,90,000 keptsame
Corporate tax surcharge reduced from7.5% to 5%.
Minimum alternate tax rate up from 18%to 18.5%.
No change in excise duty and service taxrates
7/29/2019 The Grand Presentation on BUDGET
5/60
. . . continue
1% interest subvention on home loans up toRs 15 lacs
FII can invest directly in MF schemes
Gross Domestic Product (GDP) estimatedto have grown at 8.6 per cent in 2010-11 inreal terms.
Indian economy expected to grow at 9 percent with an outside band of +/- 0.25 percent in 2011-12.
7/29/2019 The Grand Presentation on BUDGET
6/60
. . . continue
40,000 crore to be raised throughdisinvestment in 2011-12.
LLPs to be subject to Alternate MinimumTax
All individual and sole proprietor taxpayers with a turn over up to Rs.60 lac
freed from the formalities of audit.
7/29/2019 The Grand Presentation on BUDGET
7/60
7/29/2019 The Grand Presentation on BUDGET
8/60
DIRECT TAX
Employers contribution to NPS will nolonger be subject to ceiling of 1 lac
Infra debt funds to be created
Tax benefit for infra bond extended
Introduction of new simplified return formSUGAM
Surcharge cut for domestic companiesfrom 7.5% to 5%
7/29/2019 The Grand Presentation on BUDGET
9/60
continue
Dividend received from overseassubsidiaries tax at 15 %on gross basis
LLP are proposed to be charged AMT of18.5%
Surcharge cut for foreign companies for2.5% to 2%
7/29/2019 The Grand Presentation on BUDGET
10/60
..continue
Increase in MAT from 18% to 18.5%
SEZ developers & units would pay MAT at20.01%
SEZ developers would also pay DDT at16.22%
7/29/2019 The Grand Presentation on BUDGET
11/60
..continue
Tax breaks & incentives for innovation
Money market mutual fund or liquid fundsfrom25% to 30%
7/29/2019 The Grand Presentation on BUDGET
12/60
INDIRECT TAX
130 items brought under central excise
The lower rate of central excise duty hasbeen increased from 4% to 5%
Excise on ready-mades mandatory
7/29/2019 The Grand Presentation on BUDGET
13/60
..continue
Peak custom duty remains 10%
Boost for cold chain equipment
Customs duty on firm machinery cut
7/29/2019 The Grand Presentation on BUDGET
14/60
continue
Customs duty on raw silk cut
20% export duty on iron ore
Relief for cement industry
10% excise on fuel cell vehicles
7/29/2019 The Grand Presentation on BUDGET
15/60
7/29/2019 The Grand Presentation on BUDGET
16/60
Alternate Minimum Tax
LLPs to be subject to Alternate MinimumTax [New Chapter XII BA ] Clause 18
What is LLP?
A limited liability partnership (LLP) is apartnership in which some or all partners(depending on the jurisdiction) have limitedliability.
Exhibits elements of partnership and corporate.One partner is not responsible or liable for
another partner's misconduct or negligence.
7/29/2019 The Grand Presentation on BUDGET
17/60
. . . continue
LLPs to be subject to Alternate [email protected]%, in line with companies.
The tax base in the case of LLPs would be
the adjusted total income computed underthe provisions of the Income tax Act,1961 and not book profit as in the case of
corporate.
7/29/2019 The Grand Presentation on BUDGET
18/60
. . . continue
As per the provisions of the chapter XII-BA, where the regular income tax payableby a LLP for a particular financial year is
less than the corresponding alternateminimum tax computed at the rate of18.5% on its adjusted total income; such
alternate minimum tax shall be deemed tobe the income tax liability of such LLP.
7/29/2019 The Grand Presentation on BUDGET
19/60
. . . continue
Adjusted total income shall be the totalincome as increased by the deductionsclaimed under any section included in
chapter VI-A ( C ) (deductions in respectof certain income) and deductions claimedunder section 10AA.
7/29/2019 The Grand Presentation on BUDGET
20/60
AMT VS MAT
The concept to AMT is similar to theMinimum Alternate Tax (MAT), asapplicable to the Companies
But since there is no concept of bookprofits in case of LLP, the LLPs will beliable to pay AMT on their adjusted total
income (equivalent to adjusted taxableincome).
Similar to Company, LLP paying AMT canclaim its credit for 10 assessment years.
7/29/2019 The Grand Presentation on BUDGET
21/60
. . . continue
But as opposed to Company, LLP will not beliable to pay AMT on those income, whichare exempt under provisions of Income
Tax like long term capital gain undersection 10 (38) and income from dividendunder section 10 (34) etc
7/29/2019 The Grand Presentation on BUDGET
22/60
Services added to the service tax
Hotel Accommodation
Services provided by Hospital
Authorized Service Stations Services
Life Insurance Service
Commercial Training or Coaching Service
Club or Association Service Business Support Service
Services by legal professionals
Service Tax on air travel
7/29/2019 The Grand Presentation on BUDGET
23/60
. . . continue
Services provided by clinicalestablishments
Promotion of Brands of Goods, Services,
Events etc. Services provided by Electricity
Exchanges.
Special services provided by ConstructionAgencies to the buyers, such as internaldevelopment of complexes, preferred
location on extra cost.
7/29/2019 The Grand Presentation on BUDGET
24/60
7/29/2019 The Grand Presentation on BUDGET
25/60
The thing which highly affects an
individual is.PERSONAL INCOME TAX
7/29/2019 The Grand Presentation on BUDGET
26/60
INCOME TAX SCENARIO
INDIVIDUALSAY 2010-2011 below 65 AY 2011-2012 below 60
Slabs Rates Liability Slabs Rates Liability
0-1,60,000 Nil Nil 0-1,80,000 Nil Nil
1,60,000-5,00,000 10.03% 35,020 1,80,000-5,00,000 10.03% 32,960
5,00,000-8,00,000 20.06% 61,800 5,00,000-8,00,000 20.06% 61,800
Above 8,00,000 30.09% 61,800 Above 8,00,000 30.09% 61,800
Savings due to budget 2011 2060*
*2060 = 35,020 - 32,960
Roundedof relief of rs 2000 annually
Per day benefit of rs.5.48
7/29/2019 The Grand Presentation on BUDGET
27/60
Income tax scenario
WOMEN
AY 2010-2011 below 65 AY 2011-2012 below 60
Slabs Rates Liability Slabs Rates Liability
0-1,90,000 Nil Nil 0-1,90,000 Nil Nil
1,90,000-5,00,000 10.03% 31,930 1,90,000-5,00,000 10.03% 31,930
5,00,000-8,00,000 20.06% 61,800 5,00,000-8,00,000 20.06% 61,800
Above 8,00,000 30.09% 61,800 Above 8,00,000 30.09% 61,800
Savings due to budget 2011 0*
*NO BENEFITS FOR FEMALE TAX PAYERS
7/29/2019 The Grand Presentation on BUDGET
28/60
Income tax scenario
SENIOR CITIZENAY 2010-2011 above 65 AY 2011-2012 above 60 below 80
Slabs Rates Liability Slabs Rates Liability
0-2,40,000 Nil Nil 0-2,50,000 Nil Nil
2,40,000-5,00,000 10.03% 26,780 2,50,000-5,00,000 10.03% 25,750
5,00,000-8,00,000 20.06% 61,800 5,00,000-8,00,000 20.06% 61,800
Above 8,00,000 30.09% 61,800 Above 8,00,000 30.09% 61,800
Savings due to budget 2011 1030*
*1030 = 26,780 25,750
7/29/2019 The Grand Presentation on BUDGET
29/60
INCOME TAX SCENARIO
VERY SENIOR CITIZENAY 2011-2012 ABOVE 80
Slabs Rates Liability
0-5,00,000 NIL Nil
5,00,000-8,00,000 20.06% 61,800
ABOVE 8,00,000 30.09% 61,800
Savings due to budget 2011 *26,780
BONANZA FOR SENIORCITIZENS. . .
7/29/2019 The Grand Presentation on BUDGET
30/60
Lower penalty, high interest for late
payment
Penalty reduced to 1% a month or rs 100 aday- whichever is higher
Penalty reduced to 25% if tax paid within
1month interest Maximum penalty capped at 50% of the
tax amount
7/29/2019 The Grand Presentation on BUDGET
31/60
. . . continue
In case of fraud, penalty is mandatory andequal to the tax evaded
Penalty will be increased to rs.20,000 from
rs.2,000 if the returns are not filed till 40days after the due date.
Interest on the tax payment increased to
18% from 13%
7/29/2019 The Grand Presentation on BUDGET
32/60
7/29/2019 The Grand Presentation on BUDGET
33/60
AGRICULTURE
The total plan outlay for agriculture &allied sector is to be increased by 19.79%to Rs 147.44 bn.
The target agricultural credit is proposedto be raised to Rs 4,750 bn in FY12 fromRs 3,750 bn in FY11.
Interest subvention proposed to beenhanced from 2% to 3%.
7/29/2019 The Grand Presentation on BUDGET
34/60
.continue
As an initiative on vegetable clusters, anallocation of Rs 3 bn made.
Basic customs duty reduced for specified
agricultural machinery to 2.50% from 5% . The concession is also being extended to
parts of such machinery
7/29/2019 The Grand Presentation on BUDGET
35/60
POSITIVE IMPACT
The slide of measures announced for theagricultural sector highlights theGovernments thrust to facilitate storage .
Reduce the production and supply chainbottlenecks in the agricultural sector.
The Government further enhanced its
thrust to improve the storage facilities inthe agriculture sector by allocating fundsfor creation of warehousing facilities.
7/29/2019 The Grand Presentation on BUDGET
36/60
FERTILISER
Capital investment in fertiliser productionproposed to be included as aninfrastructure subsector.
Government will move towards directtransfer of cash subsidy to people livingbelow poverty line.
Extension of benefit of investment linkeddeduction to businesses engaged in theproduction of fertilisers.
7/29/2019 The Grand Presentation on BUDGET
37/60
POSITIVE IMPACT
The major move in the sector which willdrive investment by including capitalinvestment in fertilizer production.
Further, the proposed system of directtransfer of subsidy for fertilisers is seenas a good move
7/29/2019 The Grand Presentation on BUDGET
38/60
SOCIAL SECTOR
The social sector expenditure is proposedto be increased to Rs 1,608.87 bn, anincrease of 17% over the previous year.
It amounts to 36.40% of the total planedallocation.
7/29/2019 The Grand Presentation on BUDGET
39/60
. . .Continue
Human Resource Development and SocialJustice
An allocation of Rs 103.30 bn forIntegrated Child Development Services.
To create in the course of the year IndiaMicrofinance Equity Fund with a corpus ofRs 1 bn with SIDBI.
To empower women and promote their SelfHelp Groups (SHGs) creation of aWomens SHGs Development Fund with acorpus of Rs 5 bn.
7/29/2019 The Grand Presentation on BUDGET
40/60
EDUCATION
An allocation of Rs 520.57 bn in FY12 foreducation, which is an increase of 24%over FY11.
An allocation of Rs 210 bn for SarvaShiksha Abhiyan is 40% higher than Rs 150bn in FY11.
An allocation of Rs 103.80 bn for NationalProgramme of Mid Day Meals in schools.
Additional Rs 5 bn proposed to be providedfor National Skill Development Fund duringFY12.
7/29/2019 The Grand Presentation on BUDGET
41/60
HEALTH & SANITATION
A plan for the Ministry of Health andFamily Welfare is proposed to beincreased to Rs 267.60 bn from Rs 223 bn.
An allocation of Rs 178.40 bn for NationalRural Health Mission.
An allocation of Rs 93.50 bn for National
Rural Drinking Water Programme.An allocation of Rs 16.50 bn for rural
sanitation
7/29/2019 The Grand Presentation on BUDGET
42/60
INFRASTRUCTURE
An allocation of Rs 2,140 bn for thissector accounting for 48.50% of plannedexpenditure.
Permit to issue tax free bonds of Rs 300bn by various Government undertakings.
Including Rs 100 bn by Indian Railway
Finance Corporation (IRFC), Rs 100 bn byNational Highway Authorityof India (NHAI).
7/29/2019 The Grand Presentation on BUDGET
43/60
. . . Continue
Rs 50 bn by Housing and UrbanDevelopment Corporation Limited (HUDCO)and Rs 50 bn by Ports in FY12.
Interest payment on the borrowings ofthese funds to be subject to a withholdingtax rate of 5% instead of 20%.
The income on the fund would be exemptfrom tax.
7/29/2019 The Grand Presentation on BUDGET
44/60
POSITIVE IMPACT
The plan expenditure for infrastructuresector to constitute around 48.50% ,agrowth of 23.03%.
To boost non-banking financial avenues forinfrastructure companies, Budget providesthrust through various financing schemes.
7/29/2019 The Grand Presentation on BUDGET
45/60
HOSPITALITY
It is proposed that the hotelaccommodation in excess of Rs 1,000 perday .
With an abatement of 50% .So, theeffective burden is 5% of the amountcharged for Service Tax.
The services provided by air conditioned
restaurants, have license to serve liquorgiving an abatement of 70% will haveburden of 3% of the bill.
7/29/2019 The Grand Presentation on BUDGET
46/60
NEGETIVE IMPACT
Increase of service tax in hospitalitysector.
An introduction of 5% and 3% effective
burden on service sector
7/29/2019 The Grand Presentation on BUDGET
47/60
7/29/2019 The Grand Presentation on BUDGET
48/60
OVERVIEW
Gross Domestic Product (GDP) estimatedto have grown at 8.6 per cent in 2010-11 inreal terms. Economy has shown remarkable
resilience. Monetary policy measures taken expected
to further moderate inflation in coming
months.
7/29/2019 The Grand Presentation on BUDGET
49/60
. . . CONTINUE
Exports have grown by 29.4 per cent,while imports have recorded a growth of17.6 per cent during April to January
2010-11 over the corresponding periodlast year.
Indian economy expected to grow at 9
per cent with an outside band of +/-0.25 per cent in 2011-12.
7/29/2019 The Grand Presentation on BUDGET
50/60
Fiscal Consolidation
Rs. cror 2009-2010 2010-
2011(BE)
2010-
2011(RE)
2011-
2012(BE)
Revenue
Deficit
-338,998 -276,512 -269,844 -307,270
% of GDP -5.2% -3.5% -3.4% -3.4%
Fiscal
deficit
-418,482 -381,408 -400,998 -412,817
% of GDP -6.4% -4.8% -5.1% -4.6%
7/29/2019 The Grand Presentation on BUDGET
51/60
INVESTMENT ENVIRONMENT
Foreign Direct InvestmentDiscussions underway to further liberalize
the FDI policy. Foreign Institutional Investors
SEBI registered mutual funds permitted toaccept subscription from foreign investors whomeet KYC requirements for equity schemes.
To enhance flow of funds to infrastructuresector, the FII limit for investment incorporate bonds issued in infrastructure sectorbeing raised.
7/29/2019 The Grand Presentation on BUDGET
52/60
DIRECT TAX CODE
Proposed a new Direct Tax code for nextfinancial year.
This New Direct Tax Code will replace the
Income Tax Act of 1961.It will be implemented from financial year
2011-2012.
7/29/2019 The Grand Presentation on BUDGET
53/60
NEW INCOME TAX SLABS 2011-12
7/29/2019 The Grand Presentation on BUDGET
54/60
ANNOUNCEMENT 1
Increase in CRR in Banks, Higher cashinfusions in PSU Banks
Impact:
Higher liquidity in the market, Increase availability of food hence control
food price inflation
7/29/2019 The Grand Presentation on BUDGET
55/60
ANNOUNCEMENT 2
Rural Infrastructure Development Fund
Impact:
Long term growth of the Rural Sector
development of Tier 2 and Tier 3 cities into Tier 1 and Tier 2 cities,
7/29/2019 The Grand Presentation on BUDGET
56/60
7/29/2019 The Grand Presentation on BUDGET
57/60
SUMMARY
Food Price Inflation
Increasing the overall Excise Duties or
Service Tax
Support for Infrastructure
Economic Growth at 9 percent or more Focus on Rural Development
7/29/2019 The Grand Presentation on BUDGET
58/60
. . . CONTINUE
Inflation The Burning Reality!
Income Tax Exemption Yeh Dil MaangeMore!
Fuel price Deregulation Slow and Steadywins the Race!
Social sector Spending Amount b/f from
Disinvestment A/c! Retail FDI Time to tighten Supply Chain!
7/29/2019 The Grand Presentation on BUDGET
59/60
. . . CONTINUE
Excise and Service Tax Cut Status quoRequested!
Infrastructure Work in Progress!
Delay in GST Implementation NoConsensus Yet!
Education Learning is the way to Growth!
7/29/2019 The Grand Presentation on BUDGET
60/60