CA.

Bikash Bogi
Mumbai (India) bikashbogi.blogspot.com

BUDGET 2011 HIGHTLIGHTS

Direct Taxes

Tax limit raised from Rs 160,000 to Rs 180,000

For senior citizens, tax exemption limit increased to Rs2.5 lakh. Age for being classified as
senior citizen cut to 60 years from 65 years.

Rs 5 lakh tax exemption limit for individuals above 80 years of age.

MAT raised to 18.5% of book profits.

Reduce surcharge of 7.5 percent for domestic companies to 5 percent.

Tax sops of Rs 20,000 on infra bonds extended by a year.

Foreign unit dividend tax rate cut to 15% for Indian firms.

Two new CPC for IT returns processing, open by May 2011.

DTC comes in force in April 2012.

Indirect Taxes (Excise & Customs):

Standard rate of Central Excise retained at 10%

1% excise duty on 130 new item.

Base rate on excise duty raised to 5% from 4%

20% export duty on iron ore.

Stainless steel exempted from excise customs duty.

Customs duty on yarn cut to 5%.

Customs duty on raw steel cut.

Excise duty on cement industry cut

Export duty on all iron ore raised to 20%.

Cut in import duties of raw material for mobile phones.

Excise on LED cut to 5%.

No change in CENVAT rates.

Cut customs duty on pet coke, Gypsum by 2.5%

Ship owners allowed duty free imports of spare parts.

Excise tax on diapers and sanitary napkins reduced from 10% to 1%.

No excise duty on UMPP equipment.

No duty on import of equipment for Ultra Mega Power projects.

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CA. Bikash Bogi
Mumbai (India) bikashbogi.blogspot.com

Service Tax:

Service tax retained at 10%.

Life insurance services in area of investment now in service tax.

Health check up services now attracts service tax.

Service tax on hotel accommodation above Rs 1500 per day.

Domestic travel to pay Rs 50 service tax, Rs 250 on international travel.

Hospitals with more than 25 beds under service tax

Other Highlights

FY11 fiscal consolidation impressive. Services sector continues to grow in double digits. Reaching
the end of a remarkable financial year.

FY11 Fiscal consolidation impressive Stronger fiscal consolidation needed Resources are not a
constrain. Much needs to be done for the rural India.

Expect the average inflation to be down next year Indian economy is expected to grow at 9%
Development of external sector has been encouraging. Cutting bureaucratic delays, improving
response times Taxes, tariff procedures will be simplified. To reconcile environment concerns,
growth needs.

Current account deficit poses a concern 13th Finance Commission has worked out fiscal
consolidation roadmap. Agriculture growth at 5.4%, industry at 8.1% in 2010-11 Expect the
average inflation to be down next year.

DTC will moderate rates and ensure better compliance.

Next Budget will be more transparent Introduction of DTC, GST remain a watershed.

Mulling nutrient based subsidy policy for urea LPG, kerosene and fertilisers will be transferred
directly to BPL beneficiaries. The economy has shown remarkable resilience. To introduce Public
Debt Management Bill in 2012 Direct transfer of subsidy to BPL families.

GST bill in current session. Availability of fertilisers have improved Preparations for GST rollout
in final stages. Laying down fiscal consolidation map for next five years. Pilot portal to be set up
before the roll out of GST in the country.

Self-help group fund to empower women. Task force working on oil subsidy plans Rs 600 cr to
public sector banks to maintain mandatory. CRR Liberalization of FDI policy. Govt committed to
retain 51% holding in PSUs.

FII allowed to invest in MF schemes. FII limit in corporate bonds has been raised by $20
billion.

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CA. Bikash Bogi
Mumbai (India) bikashbogi.blogspot.com

FY12 Divestment target at Rs 40,000 crore. FDI regulations consolidated into one comprehensive
document States to cut down fiscal deficit to 3 percent of Gross State GDP by 2011.

Significant progress on the GST network has been made. Work is underway for states' GST. High
gap between wholesale and retail prices unacceptable.

Interest subvention of 1% extended from Rs 5 lakh crore to Rs 20 lakh crore. 1% interest

subventions on home loans up to Rs 15 lakh.

Removal of bottlenecks in the transportation of essential food items. New companies bill to be
introduced in this session. Earmarks Rs 2,000 cr each for warehousing and manufacturing. More
banking licenses to be given. To allocate Rs 6,000 cr for some PSU banks to help them maintain
Tier-I capital at 8%. To prevent fraud in loan cases: govt has set up Central Electronic Registrar.

Rural housing fund increased by Rs 1,000 cr to Rs 3,000 cr Rs 3,000 crore earmarked to NABARD
for handloom weavers.

Agricultural credit limit raised to Rs 4,75,000 crore. Allocation for farm development increased to
Rs 7,860 cr Rs 300 crore for allocation of fodder New companies bill to be introduced Rs 100 cr.
equity fund for MFIs.

Storage capacity has been fastracked 15 Mega Food parks to be set up. Subvention of 3% to
farmers paying loans before time. Allocation for farm development increased to Rs 7,860 cr. Short
term interest to farmers will continue to be at 7%.

Tax-free bonds worth Rs 30,000 cr proposed to boost infrastructure.

To attract foreign funds: Special vehicle to be created Boost to infra dev:

Anganwadi workers to get Rs 1,500 instead of Rs 750 now. Rural broadband connectivity to be
provided in 3 years. Allocation under Rashtriya Krishi Yojana raised Hunger and malnutrition:
Food security bill will be introduced this year. Comprehensive national policy to control the
trafficking of narcotic drugs.

Black money: govt will start campaign against illicit funds.

To create infra debt funds. To allow Rs 30K crore tax free bonds for railways, NHAI. Process of
service tax refunds will be simplified soon.

Self Assessment in customs to be introduced.

Money laundering cases to be dealt effectively Task force will be formed to deal with black
money. To propose National Mission for Hybrid Electric Vehicle.

To allocate Rs 58,000 cr. to Bharat Nirman projects SC/ST scholarship scheme will benefit about
40 lakh students Scholarships to SC/ST students in Class IX and X. Social projects spending
outlay up 17% to Rs 1.6 lakh crore.

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CA. Bikash Bogi
Mumbai (India) bikashbogi.blogspot.com

Vocational schemes to be introduced for the employment of the youth. 24% increase in
educational provisions. Propose to Increase the Budget group for Primitive tribal group. To
promote organic farming to help farmers boost output from their land. Food security bill to be
introduced this year.

Interest rates on agriculture loans reduced. The government is wooing the farmers' community
in this populist move.

SC/ST scholarship scheme will benefit about 40 lakh students. Scholarships to SC/ST students in
Class IX and X Social projects spending outlay up 17% to Rs 1.6 lakh crore. Vocational schemes to
be introduced for the employment of the youth

Low-cost housing loans of Rs 15 lakh (Rs 1.5 million) will be eligible for one per cent interest
subsidy, which will help in increasing the demand for such housing. Liberalizing the existing
scheme of one per cent interest subvention on housing loans up to Rs 15 lakh, where the cost
of House does not exceed Rs 25 lakh (Rs 2.5 million). The existing interest subsidy is on loans
of Rs 10 lakh (Rs 1 million) where the cost of house is Rs 20 lakh (Rs 2 million).

Assistance to N-E states will be doubled. To provide Rs 200 cr. for clean- up of lakes Rs 200 core
for launching environmental programmers. Pension amount to 80 yrs and above increased from
Rs 200 to Rs 500 Rs 52,057 cr. for education sector.

Banks to cover 20,000 villages for opening accounts in FY12 Pay of anganwadi workers up from
Rs 1,500 to Rs 3,000/month. Allocation of Rs 21,000 crore for the literacy mission. For backward
regions, allocation increased by 35% about Rs.9,000 crore.

Workers in hazardous industries, such as mining and slate, will get health benefits Rs 5,000 crore
to be provided to National Skill Dev Council.

GOM to be formed to tackle corruption CBDT to provide special web facility for salaried persons
Allocation to Justice Dept up three times to Rs 3,000 cr. FY 12 defence capex pegged at Rs 69,199
crore

Info exchange treaties signed with 13 tax havens Overall defence allocation pegged at Rs 1.64
lakh cr. Rs 3,000 crore to states to modernize their stamp and registration procedures. Amend the
Indian Stamp Act. Allocation to Justice Dept up three times to Rs 3,000 cr.

Tax procedures for small businesses to be simplified.

NOTE:

Above Highlights are on based Budget Speech of Hon’ble Finance Minister.

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