Reference Auto

Finance minister Pranab Mukherjee has given tax payers some relief in his Budget for 2011-12. He has not only raised the exemption limit for income tax payers but also lowered the age for senior citizens and even created a new category: a very senior citizen for those above the age of 80.

There will also be subsidy on home loans up to Rs 15 lakh for houses priced up to Rs 25 lakh. Also, there was a sigh of relief by India Inc, after the minister deferred rollback of the stimulus package introduced during the slowdown. The Budget, however, has not charted adequate measures to tame inflation.

Flight tickets and eating out are set to get costlier and even medical services.

The Budget was a market-friendly one, with the finance minister allowing foreign investors a greater access to the country’s bourses. It has also given a fillip to the ongoing reforms.

In the Budget, the finance minister has shown keenness to curb the flow of black money and sought to create a mechanism to check fund flow from and to countries with poor disclosure guidelines.

The finance minister has also set aside funds for top varsities like IITs and IIMs.

-- Budget estimates for 2011-12 has been projected at Rs 9,32,440 crore – a rise of 24 per cent.

-- Expenditure in 2011-12 is estimated at Rs 12,57,729 crore, a growth of 13.4%.

-- Revenue deficit has been fixed at 2.3% in revised estimates of 2010-11 and 1.8% in 2011-12.

-- Tax reductions to result in revenue loss of Rs 11,500 crore.

-- There has been no changes in tax slabs. Exemption limit for the general category has seen a rise from Rs 1,60,000 to Rs 1,80,000.

-- For women, tax exemption limit remains unchanged.

-- For senior citizens, exemption age limit pared from 65 to 60. Tax exemption limit is Rs 2,50,000.

-- Moreover, a new category, the very senior citizen, has been created for people above 80 years. The exemption limit in this case will be Rs 5,00,000.

-- Old age pension to persons of over the age of 80 will be raised from Rs 200 to Rs 500.

-- Surcharge for companies trimmed to 5 per cent, from 7.5 per cent (corporate tax surcharge cut to 5%).

-- The scope of service tax has widened and will cover hotel accommodation of over Rs 1,000 per day along with AC restaurants serving liquor, some category of hospitals and diagnostic tests.

-- Hybrid vehicles are slated to get cheaper

-- Service tax on air travel raised by Rs 50 (for domestic travel) and Rs 250 (for international travel) in economy class. On upper classes, the rate will be 10% flat.

-- Tax-free bonds of Rs 30,000 crore will be issued for infrastructure development which will cover Warehousing Corporation, IRFC, Hudco and NHAI. This will provide additional exemption for taxpayers.

-- Mutual funds can tap foreign investors.

-- MAT raised from 18 per cent to 18.5 per cent.

-- Credit flows to farmers set to go up from Rs 3.75 lakh crore to Rs 4.75 lakh crore and funding for Rashtriya Krishi Vikas Yojana will be raised from Rs 6,755 crore to Rs 7,860 crore.

-- The finance minister raised defence allocation by 11% at Rs 1.64 lakh crore.

-- Below poverty line families will see direct transfer of subsidies in kerosene and LPG.

By providing tax relief to the middle class, the finance minister has tried to woo back, in his Budget, this category, which had been disgruntled over the litany of scams and the price rise owing to the burgeoning inflation.