Union Budget 2011 - 2012

Union Budget 2011: Highlights

Indian economy expected to grow at 9% in FY12 Economy regained pre-crisis growth momentum Expect inflation and CAD to be lower in 2011-2012 Average inflation and current account deficit to be lower and better managed next year Economic growth seen at 8.75-9.25% in FY1 GDP in FY11 estimated to have grown at 8.6% in real terms 'Corruption is a problem; must fight it collectively See FY11 farm growth at 5.4%, GDP growth at 8.6% FY11 industrial growth seen at 8.1%, services growth at 9.6%

Union Budget 2011: Highlights so far

High gap between wholesale, retail prices 'unacceptable MF can accept subscription foreign investors who meet KYC norms To introduce Public Debt AMC of India Bill in FY12 Divestment in FY12 seen at Rs 40000cr Will introduce GST Bill in current session Govt will move to direct transfer of fertiliser subsidy to cos Direct Tax Code will be effective April 1, 2012 DTC will be finalised in 2011 Exports grown by 29.4%; imports grown by 17.6% Current account deficit at 2009-10 levels Huge differences between wholesale and retail prices not acceptable

Union Budget 2011: Highlights so far

Expect RBI to moderate inflation in coming months Shortfalls in distribution and marketing systems in food Economy has shown resilience to external and internal shocks Consumers have been denied a seasonal fall in food prices Growth in 2010 has been broad based Fiscal consolidation has been impressive Food inflation still remains a concern Have to ensure more stable macro economic environment Budget is a transition towards transparent economy Do not foresee resources being a major constrain in medium-term Economy regained pre-crisis growth momentum

TAX IMPACTS & KEY ISSUES

Corporate tax surcharge reduced from 7.5% to 5%. Minimum alternate tax rate up from 18% to 18.5%. IT exemption for taxpayers raised from Rs 1.6 lakh to Rs 1.8 lakh. Tax relief is about Rs 2,000 across-the-board. Senior citizens to get higher IT deduction limit of Rs 2.5 lakh. Entitlement age reduced to 60 from current 65 New category of senior citizens above 80 years to get higher IT deduction limit of Rs 5 lakh from this year Service tax levels and excise stay at 10%; Peak rate of customs duty remains unchanged Excise exemptions withdrawn on 130 items; to pay minimum excise of 1% from next year Govt to allow issue of Rs 30,000 crore worth of tax-free bonds by infrastructure companies in 2011-12

TAX IMPACTS & KEY ISSUES

Tax deduction for investment in infrastructure bonds of Rs 20,000 extended for one more year Investment in fertiliser plants and machinery to be treated as infrastructure investment Fiscal deficit for 2010-11 seen at 5.1% against 5.5% budgeted; deficit for 2011-12 projected at 4.6% of GDP Government to introduce direct cash payments for those entitled to subsidies in kerosene, cooking gas and fertiliser by March, 2012 Government considering extension of nutrient-based subsidy for urea, the largest chunk of fertilisers used in agriculture National mission for electric and hybrid vehicles to be set up to create environment-friendly automobiles

TAX IMPACTS & KEY ISSUES

Priority sector home loans limit raised to Rs 25 lakh from Rs 20 lakh Interest subvention on home loans up to Rs 15 lakh. Mortgage risk guarantee corporation to insure loans to the poor Public sector disinvestment target for 2011-12 is raised to Rs 40,000 crore Center's net borrowing figure for 2011-12 fixed at Rs 3,43,000 crore; fiscal deficit figure at Rs 4,12,000 crore Cement excise duties will be shifted to valorem basis from specific duty now Loss on direct tax reliefs at Rs 11,500 crore; gain on indirect tax changes at Rs 11,300 crore

Tax Slabs for 2011 - 2010

Male individual taxpayer

Slab (Rs) 0-160000 160001- 500000 500001- 800000 800001

Rate Nil 10 20 30 Old Slab

Slab (Rs) 0-180000 180001- 500000

Rate Nil 10

500001- 800000
800001

20
30

New Slab

Tax Slabs for 2011 - 2010

Female individual taxpayer

Slab (Rs) 0-190000 190001- 500000 500001- 800000 800001 and above

Rate Nil 10 20 30 Old Slab

Slab (Rs)

Rate

0-190000
190001- 500000 500001- 800000 800001 and above

Nil
10 20 30 New Slab

Tax Slabs for 2011 - 2010

Senior Citizens

Slab (Rs) 0-250000 250001- 500000 500001- 800000 800001 and above

Rate Nil 10 20 30 Old Slab

Slab (Rs)

Rate

0-240000
240001- 500000 500001- 800000 800001 and above

Nil
10 20 30 New Slab