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DECODING UNION BUDGET ANALYSIS 2011-12 BY C.A VIJAY VORA CHARTERED ACCOUNTANT

DECODING UNION BUDGET ANALYSIS 2011-12 BY C.A VIJAY VORA CHARTERED ACCOUNTANT. BASICS OF BUDGET.

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DECODING UNION BUDGET ANALYSIS 2011-12 BY C.A VIJAY VORA CHARTERED ACCOUNTANT

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  1. DECODING UNION BUDGET ANALYSIS2011-12BYC.A VIJAY VORACHARTERED ACCOUNTANT

  2. BASICS OF BUDGET The Union budget is country’s Annual Financial Statement of Receipts and Payments similar to individual’s Cashflow.It contains expected Revenue ( to be received) and expected Expenditure ( to be met) in the coming Financial Year. • Who Prepares? • When the Union Budget is presented? • What is Budget Process?

  3. What is Budget Process? • Ministry of Finance is responsible for Budget preparations. • Draft Budget based on input • Approved by Finance Ministry in consultation with Prime Minister. • Final Budget is then presented in the Parliament. • A discussion is made in parliament. • FM responds to all issues based on discussion, revision is made in Budget • Once approved 2 Bills are prepared and introduced in Lok Sabha. Appropriation Bill ( Final approval of funds be given to each ministry ) and Finance Bill (Tax proposals) Union Budget is approved then Act is made.

  4. ROAD TO PROGRESS ?

  5. DECADE OF VOLATILITY ( In Capital Market )

  6. BUDGET ESTIMATE FISCAL DEFICIT CENTRAL VALUE ADDED TAX (CENVAT) DIRECT TAX INDIRECT TAX DIRECT TAX CODES ( DTC ) SURCHARGE & CESS SUBSIDY / GRANT GOODS & SERVICES TAX SERVICE TAX AD VALOREM & SPECIFIC DUTY BUDGET BIOPSYBasically many terms are used in the Budget which can be summarized as under

  7. CONSTRAINTS WITH FINANCE MINISTER • PRICE RISE / INFLATION • GLOBAL RECESSION • INTERNAL SECURITY • INVESTMENT CLIMATE FOR FII • INTEREST RATES – DOMESTIC • FOREIGN CURRENCY MOVEMENT • STRENGTHENING RUPEE / DOLLARS • CONTROLLING FISCAL DEFICIT • PSU – DISINVESTMENT – ASAP • INFRASTRUCTURE N AGRICULTURE TO PRIORTISE • 13th PLANNING COMMISSION (2010-2015)

  8. AAM ADMI BACHAT

  9. NEW TAX CONCESSIONS: Tax Rate • Up to Rs 180,000 Nil • Rs.180,001 to Rs.500,000 10% • Rs. 500,000 to Rs.800,000 20% • Above Rs.800,001 30%

  10. SALIENT BULLETS FROM BUDGET • DIRECT TAXATION : • More Relief to individual Tax Payers under Income Tax slab. • Additional deduction of Rs. 20,000 over Rs 100,000 limit on TAX Savings for long –term investment in Infrastructure Bonds – notified by Central Govt. continue for 1 more year • Minimum Alternate Tax ( MAT ) increased from 18% to 18.5% of book profit. • Tax Deduction at Source unchanged • Surcharge on Domestic Companies reduced from 7.5% to 5 % • Sr.citizen age limit lowered – 65 to 60 n rs.5lacs to above 80 yr • New pension scheme-deduction permitted u/s 80 CCD • Weighted deduction to approved scientific research prog.200% • SEZ to pay MAT , n exemption discontinue from DDT for SEZ

  11. Expenditure on Research and Development Expenditure given weighted deduction UPTO 200%.FOR APPROVED IIT , university,national lab • Hotel n Hospital industry allowed to get set off against current operation 12 Limit of Turnover for accounts needs to be audited increased from Rs.40 Lacs to Rs.60 Lacs, for Business and from Rs.10 Lacs to Rs.15 Lacs for Professionals. 13 Direct Tax Code (DTC) to be introduced by April 2012. 14 New simplified SUGAM Form to be introduced. 15 GST to be INTRODUCED BY APRIL 2012

  12. INDIRECT TAXATION: • Goods and Services Tax to be introduced from April, 2012 ( extended limit) – Tax Rate @ - !! • Excise duty – on all products 130 items ( other than petroleum and diesel products ) increased by 1 % • Central Excise duty on petrol and diesel un changed. • New services added – air conditioned restaurant n short term accomodation provided by hotel , inn, guest house,clubs ,camp sites – for less than 3 months-1000pd • Service Tax Rate remained unchanged @ 10%. However new services included in list as above of as well as various scope of services either extended or altered such as

  13. GOLD / SILVER – duty unchanged . • Rules to determine the point of time when services to be provided such as #date on which service is provided or to be provided , #date of invoice, #date of receipt of payment –earliest of above –effective from 1-4-2011 • Change in penalty provisions, rate of interest, delay in filing returns – effective from enactment of this bill

  14. COMES FROM: 23% Corporate Tax 9% Income Tax 9% Customs Duties 10% Excise Duties 6% Service Tax 29% Borrowings and others 14% Non- Tax Revenue & Debt Capital Receipts. 100 TOTAL GOES TO: 19% Interest Payment 7% Plan to State 11% Defense 9% Subsidies 16% State Share of duties / Taxes 17% Others. (non-plan) 21% Central Plan 100 TOTAL BUDGET EQUATION RUPEE

  15. OTHER ISSUES IN BUDGET • Banking guide lines , insurance n pension ,acts to be amended • Initiative for e-filing n e-payment of taxes • UID MISSION -10lacs AADHAAR no to be generated every day from 1-10-11 • Fivefold strategy to deal with Black Money • Surcharge on corporate lowered by 5% • Cleaning Rivers n Lakes-except Gangarvr

  16. Soaps to NRI,FII,FDI • Foreign dividend tax rate cut to 15% for indian companies • FII investments in Corporate bondshiked to 40bn usd • Liberalising FDI policy –discussion paper • Private equity to get boost • FII N NRIs are allowed to invest in MF

  17. THANK YOU ALL Mr. VIJAY VORA (C.A) E-mail: vijayvora2@rediffmail.com

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