Mr Pranab Mukherjee has presented the budget keeping in mind the five focus area: |
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• | Revival of domestic consumption |
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• | Achieve an enabling environment for revival of high growth |
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• | Remove supply bottlenecks |
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• | Intervene decisively to address malnutrition |
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• | Expedite improvement in delivery systems and address black money |
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As per the Union Budget 2012-13, the growth in FY 2011-12 has slowed due to the global crisis with the Indian economy expected to grow at 6.9% with agricultural sector growing at 5.4% and services sector growing at 9.6% in financial year 2011-12 and the GDP growth expected during FY 2012-13 at 7.85%. The fiscal deficit is 5.1% of the GDP for the fiscal year 2013. |
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We have summarized below the key highlights of the Union Budget 2012-13 as tabled in the Lok Sabha earlier today: |
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1. | Number of measures proposed to deter generation and use of unaccounted money |
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2. | Dedicated information cells to track black money with an introduction of white paper on black money |
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3. | National population registry project to be completed in the next two years |
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4. | Additional interest subvention 3% on loans upto Rs. 3 lakhs to women self help groups |
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5. | National Rural Livelihood Mission to provide self employment |
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6. | External Commercial Borrowings (ECB) allowed to part finance rupee debt of power projects |
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7. | ECB for working capital requirement of aviation industry for a period of 1 year with an upper cap of USD 1 billion |
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8. | FDI in aviation sector is under consideration |
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9. | India opportunity venture fund to be launched |
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10. | Tax free infra bonds to be raised to Rs. 60,000 crore |
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11. | Telecom towers eligible for viability gap funding |
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12. | QFIs would be allowed to access corporate bonds |
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13. | Plan to incorporate financial holding company for bank capitalization |
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14. | Plan to bring subsidy to 1.7% in 3 years |
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15. | Goods and Service Tax Bill (GST Bill) proposed to be operational by August 2012 |
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16. | Service tax rates proposed to be hiked from 10 percent to 12 percent |
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17. | Excise duty proposed to be hiked to 12 percent |
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18. | Negative list introduced for Service tax exempting 17 specified services which includes school education |
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19. | Efforts on for consensus with states on FDI in multi-brand retail |
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20. | Infrastructure investment in 12th Plan to go up to Rs. 50 lakh crore; half of it to come from private sector |
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21. | Corporate market reforms to be initiated |
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22. | Bills on micro-finance institutions, national land bank and public debt management among those to be introduced in 2012-13 |
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23. | New equity savings scheme to provide for income tax deduction of 50% for those who invest Rs.50,000 in equity and whose annual income is less than Rs. 10 lakhs |
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The FM in his efforts to align the Income-tax Act, 1961 to the Direct Taxes Code has proposed the following amendments in the Budget: |
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1. | Basic exemption limit for general tax payers has been raised from Rs. 180,000 to Rs. 200,000. |
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2. | Individual will have to pay 10 per cent tax on income between Rs. 2 lakh and Rs. 5 lakh; 20 per cent between Rs. 5 lakh and Rs. 10 lakh; and 30 per cent for above Rs. 10 lakh. |
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3. | Interest on savings account exempt upto Rs. 10,000 |
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4. | Reduction in STT rate by 20% from 0.125% to 0.1% |
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5. | Turnover limit for compulsory tax audit for SMEs raised from Rs. 60 lakh to Rs. 1 crore |
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6. | Withholding tax of 5% would apply for interest on overseas borrowings |
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7. | To encourage forex inflow, the rate of taxation for foreign dividend has been maintained at 15% for Indian companies |
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8. | General Anti Avoidance Rule being introduced to counter aggressive tax avoidance |
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9. | New revised income tax return form ‘Sugam’ to be introduced for small tax payers |
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10. | Minimum alternate tax raised from 18% to 18.5% of book profits |
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11. | Introduction of Advance pricing arrangement |
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12. | Removal of specified sectors for investment by domestic venture capital fund |
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13 | Time limit for reopening of assessment raised to 16 years |
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