INDIAN UNION BUDGET 2011-2012 Highlights

1. INDIAN UNION BUDGET2011-2012Highlights Powered By

2. Dearer -Legal Services -Healthcare in top – end Pvt. hospitals. -Branded Cloths -Gold -A/c restaurants serving Liquor -Hotel Services -Printers -Paper -Soap -Steel -Diapers & Sanitary napkins -Homoeopathic Medicines -Yarn/raw silk -Mobile Phones -Agarbatti -Solar Lantern, LED Lights -Battery Driven- Vehicles -Agriculture machinery Cheaper -

3. DIRECT TAXESCorporate tax • The Direct Taxes Code is likely to be effective from 1 April 2012 • The Corporate tax,Firms,Local authority, Co operative Societies rate remains unchanged • The basic rate of MAT increased to 18.5% from 18 % • The surcharge for domestic companies reduced to 5% from 7.5 % • The surcharge Non domestic companies reduced to 2 % from 2.5 % • NEW INCOME-TAX return form called Sugam to be introduced for small business. • Salary earners having an income of less than ` 5 lakh is exempted for filing income tax return from this year. • Provision for tax-free infrastructure bonds extended by 1more year

4. TAX HOLIDAY for IT companies finally ends Levy MAT on developers of SEZ and units operating in them. • Levy Alternative Minimum Tax (AMT) in the case of Limited Liability partnerships at 18.5% • Money market and debt funds will pay a higher dividend Distribution tax (DDT) for investment made by firms. • DDT will rise to 30% from 25% but stay unchanged at 12% for individual investors. • The TDS structure & rates remains unchanged • Above rules are made effective from 01.04.2011

5. Personal Taxation • For MEN Current Slabs (`) Proposed Slabs (`) Basic rate of tax Upto160,000 Upto180,000 Nil 160,001to500,000 180,001to500,000 10% 500,001to800,000 500,001to800,000 20% Above800,001 Above800,001 30% For WOMEN No change in tax Structure Upto190,000 Upto190,000 Nil 190,001to500,000 190,001to500,000 10% 500,001to800,000 500,001to 800,000 20% Above800,000 Above800,000 30%

6. For Senior Citizen (60-80years) Age for eligibility reduced from 65 years to 60 Years Upto 240,000 Upto 250,000 Nil 240,001to500,000 250,001to500,000 10% 500,001to800,000 500,001to800,000 20% Above800,001 Above 800,001 30% For Senior Citizen (80years & above) Hike in exemption limit to ` 5 lakh will result on big gains Upto 240,000 Upto 500,000 Nil 240,001to500,000 - 10% 500,001to800,000 500,001to800,000 20% Above 800,001 Above 800,001 30%

7. INDIRECT TAXESCentral excise • Central Excise Duty to be maintained as 10% only (un changed) • Nominal Central Excise Duty of 1 % without Cenvat credit facility is being imposed on 130 items entering in the tax net. • Lower rate of Central Excise Duty enhanced from 4 % to 5 % • Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 per cent. • Labelled jewellery and Precious metals attract 1% excise duty. • Excise duty on sanitary napkin, baby & clinical diapers and adult diapers is being reduced from 10% to 1% with no cenvat credit. • Concessional rate of excise duty for Hydrogen / hybrid vehicle. • Exemption withdrawn on HD drive, CD/DVD drive,& writers, Flash memory, Combo drives meant for fit inside of CPU or Laptop will attract 5% of concessional excise duty . Changes come into effect immediately unless otherwise specified.

8. Service tax • Service tax rate remains unchanged at 10 percent as a pre-cursor to GST • Legal Cases will also become a costly affair to cover all legal consultations, except individual to individual ,under service tax net. • Hotel accommodation in excess of ` 1,000 per day will come under the ambit of tax ,although there will be an abatement of 50% • service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax at 3- 5%. After an abatement of 70% • Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning at the rate of 5% • Service Tax on air travel raised from ` 100 to ` 150 in the case of domestic air travel and ` 500 to ` 750 on international journeys by economy class. • The domestic air travel on higher classes will be taxed at the standard rate of 10% • Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net. • Above rules are made effective from 01.04.2011

9. Customs duty • Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent • Basic customs duty on raw silk reduced from 30 to 5 per cent. • Basic customs duty on solar lantern or lamps reduced from 10 to 5% • CVD exempted fully on LEDs used for manf of LEDs light & fixtures. • Fully exemption from basic custom duty is being extended battery charger, hands free, head phones and PC connectivity cable of mobile handset including cellular phones. • Basic customs duty on bamboo used for manf of agarbattis is being reduced from 30% to 10% • The government has added a fixed excise duty of ` 160 per tonne on cement and reduced custom duty on petcoke and gypsum, key inputs for the sector. • Changes come into effect immediately unless otherwise specified.

10. Goods and service tax • GST proposed to be rolled out from April 2012 • Several proposals under the existing tax regime should facilitate a move to wards GST: • Focus on building robust IT infrastructure • Further rationalization of rates under Excise and Customs • Central sales tax • No Changes in CST act 1956

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