No Change In General Cenvat Or Service Tax Rates
Ad Valorem Component Of Excise Duty On Petrol And Diesel Reduced From 8% To 6%
Excise Duty Exemption Limit For Small Scale Industry Increased From Rs. 1 Crore To Rs. 1.5 Crore
Service Tax Exemption Limit For Small Service Providers Raised From Rs. 400,000 To Rs. 800,000
Service Tax Extended To Some New Areas - They include services outsourced for mining of minerals, oil or gas, asset management and design services, development and supply of content for use in telecom and advertising purposes and renting of immovable property for commercial purpose.
Central Sales Tax To Be Reduced From 4 To 3%
No Change In Personal Income Tax Rates But Threshold Limit Of Exemption In All Cases Incrased By Rs. 10,000
CAPITAL MARKETS INITIATIVES IN BUDGET 2007-08 In line with measures announced every year to strengthen the capital markets, Finance Minister Shri P. Chidambaram proposed in the Budget 2007-08:
- PAN to be made sole identification number for all participants in securities market with an alpha-numeric prefix or suffix to distinguish a particular kind of account;
- Idea of Self Regulating Organisations (SRO) to be taken forward for different market participants under regulations to be made by SEBI;
- Mutual funds to be permitted to launch and operate dedicated infrastructure funds;
- Individuals to be permitted to invest in overseas securities through Indian mutual funds;
- Short selling settled by delivery, and securities lending and borrowing to facilitate delivery, by institutions to be allowed; and
- Enabling mechanism to be put in place to permit Indian companies to unlock a part of their holdings in group companies for meeting their financial requirements by issue of Exchangeable Bonds.
Maximum Limit Of Deduction In Respect Of Medical Insurance Premium To Be Increased To Rs. 15,000; For Senior Citizens The Limit Is Rs. 20,000
Corporate Income Tax Rate Remains Unchanged; Surcharge On Income Tax On All Firms And Companies With A Taxable Income Of Rs. 1 Crore Or Less Removed
Five Year Income Tax Holiday For New Hotels in NCTD - Fresh tax concessions have been allowed in the Budget 2007-08 to promote infrastructure facilities. A five year holiday from income tax has been allowed for two, three or four star hotels as well as convention centres with a seating capacity of not less than 3,000 located in National Capital Territory of Delhi or in the adjacent districts of Faridabad, Gurgaon, Gaziabad or Gautam Budh Nagar. These should be completed and begin operation during the period April 1, 2007 to March 31, 2010. The step is aimed at meeting the requirement of 20,000 additional hotel rooms for the Commonwealth Games.
Tax Holiday For Undertakintgs In Jammu & Kashmir Extended Up To March 31, 2012 - In the new Budget proposals, the Finance Minister has extended the tax holiday for undertakings in Jammu and Kashmir by another five years upto March 31, 2012. The step is aimed at promoting further investment in the State
Rate Of Dividend Distribution Tax Raised From 12.5% To 15% On Dividends Distributed By Companies And To 25% On Dividends Paid By Money Market Mutual Funds And Liquid Mutual Funds i.e. In the case of dividends distributed by money market mutual funds and liquid mutual funds, tax on dividends paid has been raised to 25 per cent for all investors.
Banking Cash Transactions Tax Exemption Limit For Individuals And Hufs Increased From Rs. 25,000 To Rs. 50,000
Additional Cess Of 1% Levied On Taxes To Fund Secondary And Higher Education - In the Budget 2007-08, an additional cess of one per cent on all direct taxes has been levied to fund secondary and higher education. This would also be used towards expansion of capacity by 54 per cent for reservation for socially and educationally backward classes. The present 2 per cent education cess to fund basic education will also remain.
Employees’ Stock Option Plan To Be Brought Under Fringe Benefit Tax - Employees’ Stock Option Plan (ESOP) has been brought under the Fringe Benefit Tax (FBT) in the Budget 2007-08. The value of the fringe benefit will be determined in accordance with a prescribed method on the date of exercise of the option. Expenditure on free samples and displays has been excluded from the scope of FBT.
CIGARETTES TO COST MORE ; PAN MASALA CONTAINING NO TOBACCO TO COST LESS Specific rates of excise duty on cigarettes are proposed to be increased by about 5 percent in the new Budget. Presenting the General Budget 2007-08 in the Lok Sabha today, the Finance Minister also proposed a raise in excise duty on biris from Rs.7 to Rs.11 per thousand for non-machine made biris and from Rs.17 to Rs.24 per thousand for machine made biris.
Shri P. Chidambaram has reduced the excise duty from 66 percent to 45 percent on pan masala containing no tobacco. He also withdrew the exemption for pan masala containing tobacco and other tobacco products that is now given to units in the North Eastern States.
Peak Rate For Customs Duties For Non-Agricultural Products Reduced From 12.5% To 10% - Custom Duties On Most Chemicals And Plastics Reduced From 12.5% To 7.5% - The peak rate Customs Duty for non-agricultural products is proposed to be reduced from 12.5 percent to 10 per cent. Announcing this, while presenting the General Budget 2007-08 in the Lok Sabha today, the Finance Minister, Shri P. Chidambaram said that this reduction is one more step towards comparable East Asian rates. He proposed duty reduction on most chemicals and plastics from 12.5 percent to 7.5 percent. Duty reduced on seconds and defectives of steel from 20 percent to 10 percent while all coking coal irrespective of ash content is fully exempted from duty.
The Finance Minister has reduced the Customs Duty on polyester fibers and yarns from 10 percent to 7.5 percent, consequently the duty on raw materials such as DMT, PTA and MEG will also be reduced from 10 percent to 7.5 percent.
Shri Chidambaram also proposed to bring down the duty on cut and polished diamonds from 5 percent to 3 percent; on rough synthetic stones from 12.5 percent to 5 percent; and on unworked corals from 30 percent to 10 percent. He has fully exempted dredgers from import duty.
During Three Years Of UPA Government, GDP Growth Rate Improves From 7.5% In 2004-05 To 9.2%
In 2006-07; Growth Rate In Manufacturing Goes Up From 8.7% To 11.3% And In Services From 9.6% To 11.2%
Average Growth Of Agriculture Sector During Tenth Plan Estimated At 2.3%
Average Inflation In 2006-07 Estimated At 5.2-5.4%
Bharat Nirman Makes Impressive Progress - The UPA Government will continue to give high priority to Bharat Nirman and other Flagship Programmes during the next financial year. Presenting the Union Budget for 2007-08 in Lok Sabha today, the Finance Minister, Shri P. Chidambaram announced that for Bharat Nirman, a sum of Rs. 24,603 crore would be provided in 2007-08 as against Rs.18,696 crore (including the NER component) in 2006-07. It marks an increase of 31.6 per cent.
Shri Chidambaram informed that in the current financial year, Bharat Nirman will create 24 lakh hectares additional irrigation potential, provide drinking water to about 73 thousand habitations, construct 15 lakh rural houses and provide telephone to 20 thousand villages.
Gross Budgetary Support For Plan To Be Increased to Rs. 205,100 Crore From Rs. 172,728 Crore
Non-Plan Expenditure To Go Up By 6.5% To Rs. 435,421 Crore
.Allocation For Bharat Nirman Increased by 31.6% To Rs. 24,603 Crore
Allocation For Education Increased By 34.2% and for Health & Family Welfare By 21.9%
Mid-Day Meal Scheme To Cover Children Of Upper Primary Classes in 3,427 Educationally Backward Blocks
National Means-Cum-Merit Scholarship Scheme Introduced For Students From Class Ix To Xii; 100,000 Scholarships To Be Awarded Every Year
National Rural Employment Guarantee Scheme To Be Expanded From The Current 200 To 330 Districts
Allocation For SCS And STS Substantially Increased
Provision Of Rs. 108 Crore For Multi-Sector Development Programme In Districts With Concentration Of Minorities
Interest Subvention Scheme For Short-Term Crop Loans To Continue
National Agricultural Insurance Scheme To Continue In Present Form
Death And Disability Insurance Cover Through LIC To Be Extended To Rural Landless Households under Aam Admi Bima Yojana
Limit Of Loans Under Differential Rate Of Interest Scheme For Weaker Sections Raised
National Housing Bank To Introduce Reverse Mortgage For Senior Citizens
Allocation For Defence Increased To Rs. 96,000 Crore - The Finance Minister, Shri P. Chidambaram, has proposed to increase the allocation for defence to Rs. 96,000 crore. While presenting the Budget proposals for the year 2007-08 in the Lok Sabha today, the Minister stated that this would include Rs. 41,922 crore for capital expenditure. He further added that any additional requirement for the security of the nation would be provided.
Allocation For E-Governance Increased From Rs. 395 Crore To Rs. 719 Crore - The Government has proposed to enhance the allocation for e-governance from Rs. 395 crore in the year 2006-07 to Rs. 719 crore in 2007-08. While presenting the Budget proposals in the Lok Sabha today, Finance Minister Shri P. Chidambaram stated that the Government has launched an ambitious programme for e-governance. Its main objective is to improve efficiency, convenience, accessibility and transparency in Government functions and take Government services to the common citizen.
Since the Central Government supports e-governance action plan at State levels, the Finance Minister also proposed to increase the allocation for such support from Rs. 300 crore in 2006-07 to Rs. 500 crore in 2007-08. He also proposed to provide Rs. 33 crore for a new scheme of manpower development for the software export industry.
Government To Support Creation Of About 100,000 Jobs Every Year For Physically Challenged
For Current Year Revenue Deficit To Be 2% and Fiscal Deficit 3.7% - Both Lower Than Budget Estimaes
Revenue Deficit For 2007-08 Estimated At 1.5% Of GDP and Fiscal Deficit At 3.3% Of GDP
Article Source : Share Market Basics
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