Today is Feb 28.. the financial budget day!
To tell you, the budget is not that great for salaried class...
The budget is growth oriented at large.
Here are the budget highlights -
The budget session started at 11am. With the same gaga, our FM P Chidambaram expressed his concern on rising inflation and growth to be the priority for this budget. So, the growth target is set to 9.2%. Avg inflation estimated for FY07 is 5.2%-5.4%.
First the things directly associated to salaried class -
The income tax limit will not be changed. The threshold limit has been raised by Rs 10,000 giving every assessee a relief of Rs 1,000.
Tax payers will have some relief: the exemption limit has been increased to Rs 110,000. For women, it has been increased to Rs 145,000. For senior citizens: to Rs 195,000.
Medical insurance will be increased to Rs 15,000. For senior citizens, it has been increased to Rs 20,000.
There will be a service tax on Residents Welfare Associations whose members contribute more than Rs 3,000.
Two lakh people will benefit from the service tax exemption. The Government stands to lose Rs 800 crore.
Now indirectly :) how the budget will affect us - products that will be cheaper post budget -
1. PETROL and DIESEL
The duty on petrol and diesel have also been cut to 6%.
The excise duty on biscuits costing less than Rs 50/kg has been abolished. Mostly only ParleG is the one which falls in this:)
3. READY MADE FOOD MIXES
The Budget abolished the excise duty on all ready made food mixes.
Pharma and the biotech machinery duty has been cut to 5% from 7.5%. There has also been a cut in the general custom rate on medical equipment by 5%
5. SUNFLOWER OIL/EDIBLE/CRUDE OIL
The FM stated that customs duty on the sunflower oil has been cut by 15 percentage points. The CVD on crude and refined edible oil has been cut to 4%.
The Budget cut custom duty on cut and polished gems to 3% from 5% \
Apart from that, all coking coal has been exempt from customs duties and the customs duty on plastics has also been reduced to 5%. The customs duty on polyester fibre and yarns have been cut from 10% to 7.5% and the duty on seconds and defectives of steel has been reduced from 20% to 10%.
This will affect a little... And for the smokers - Cigarettes and gutka will be more expensive. Excise duty on cigarettes hiked by 5%.
Apart from these, the budget is hard-hitting for IT and cement sector.. thats the reason today stock market came rolling down and lot of selling was seen in these sectors.
Excise duty on cement costing over Rs 190/kg hiked to Rs 600/mt
IT/ITES pack to come under MAT - to pay 11.22% of adj bookprofits
Some trading related -
* no changes in STT (good!) and capital gains tax.
* ESOPS to come under FBT
* Dividend distribution tax raised to 15% from 12.5%
* Capital Gains Tax imposed on invst in works of art
Infrastructre gets a boost in this budget and so does education and agriculture and tourism! This is good and necessary for India's growth!
* To increase provision for National Highway Development Programme to Rs 10,667 crore versus Rs 9,945 crore.
* Further, allocation for rural road programme of RIDF-13 continues to be at Rs 4,000 crore.
* He also announced that two more ultra power projects would be approved by July 2007.
* Further, an outlay for irrigation has also been announced at Rs 11,000 crore.
* He has also announced a hike in tourism infra to Rs 520 crore from Rs 423 crore.
* Further, MFs will now be able to launch dedicated infrastructre fund
Heres the complete list of budget highlights -