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Highlights Of The Budget 2010

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  • Fiscal Deficit for 2010-11 – 5.5 % of GDP ( to be brought down to 4.8 % and 4.1 % in next two fiscal years. Revised Estimate for Fiscal Deficit for 2009-10 is 6.9%
  • GDP growth expected to be at 7.2 % and could be higher when Q3 and Q4 are taken into account
  • Disinvestment to fetch Rs. 25,000 Cr
  • Challenges before the Government
    1. Quickly revert to 9 % GDP growth and then aim for double digit growth
    2. Make growth inclusive
    3. Strengthen food security
    4. Overcome weakness in government’s public delivery system.
  • Corporate Sector
    • MAT rate increased from 15% to 18 %
    • Surcharge rates reduced from 10% to 7.5 % on Corporate income tax
    • Threshold limits for TDS to be rationalised
  • Personal Taxation
    • Tax Slabs Broadened
      • Exemption limit retained at Rs 1.6 Lakh
      • Income from Rs. 1.6 Lakh to Rs. 5 Lakh to be taxed @ 10 percent ( currently it is up to Rs. 3 Lakh)
      • Income from Rs. 5 Lakh to Rs. 8 Lakh to be taxed @ 20% percent( currently it is from Rs. 3 Lakh to Rs. 5 Lakh)
      • Income above Rs. 8 Lakh to be taxed @ 30 percent ( currently it is Rs. 5 Lakh)
    • Additional Rs.20,000 deduction for investment in infrastructure bonds
  • Simplified Tax Administration
    • Direct Tax Code to be implemented from 1st April 2011
    • GST also planned to be implemented from April 2011
    • IT returns forms for individual tax payers to be further simplified
    • Two more Central Tax Procession Centres to be set up ( in addition to present one at Bangalore)
  • Excise Duty
    • General Excise Duty raised from 8 % to 10%
    • Higher Excise Duty on – Large Cars, SUVs, MUVs, Smoking and non-smoking tobacco
  • Custom Duty
    • Peak custom duty remains at 10 percent
    • Cut on import duty on photovoltaic units
    • Lower import duty on – select road project equipments, LED Lights,
  • Service Tax
    • Service Tax remains unchanged
    • New services brought under service tax net
    • News Agencies exempted from service tax
  • Infrastructure Sector
    • 46% of Plan Expenditure allocation in 2010-11 will be for infrastructure development.
  • Power & Energy
    • Coal Regulatory Authority to be set up. Competitive bidding for Coal Blocs.
    • National Clean Energy Fund to be established.
    • Kirit Parekh Report on Fuel Price deregulation to be taken up by the Ministry of Petroleum in due course
  • Exports
    • Government to continue interest subvention of 2% for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises.
  • Agriculture
    • Draft Food Security Bill prepared and will be put in the public domain
    • Participation of private sector in grain storage to continue for another 2 years
    • New Fertilizer Policy from April 2010 which will to improved productivity and farm income
    • Five more Mega Food Procession Projects in addition to 10 existing ones
    • ECB available for cold storage
  • Rural Economy
    • Debt Repayment period extended to June 2010.
  • Banking & Financial Sector
    • Banking facilities to be provided to all habitations with a population of 2000 and more
    • Apex Level Financial Stability Council to be set up for Banking Sector
    • Additional banking licenses to be given to private players / NBFCs
    • Further capital to Region Rural Banks to be provided.
    • Further capital infusion in PSU banks to maintain Tier –I Capital Adequacy Ration
  • Social Security
    • National Social Security Fund to be created in unorganised sector with allocation of Rs. 1000 Cr.
    • Govt to contribute Rs. 1000 /- for each National Pension Scheme Account opened by workers in the unorganised sector
  • Tourism
    • Rs. 200 Cr special package to Goa to prevent soil erosion and increase green cover on Goa Beaches
    • Investment linked tax deductions