The NikP Blog: Budget of India : A Summary

Hey Guys

Here is a short, and incomplete summary of my understanding of the Budget Presented by the Finance Minister : Mr P.Chidambaram today. I will put forward my novice point of views very soon :)

Education Cess Increased to 3% from 2%
MAT Introduced in IT Sector @ 11.33% of Adjusted Book Profits
Excise Duty on Cement Increased to Rs 600 Per Ton for bags above Rs 190
Bags Below Rs 190 Mark, Excise Duty is slashed by Rs 50
Non Taxable Income increased to Rs 1,10,000 Only
The markets were spared hikes in STT and long term capital gains tax,
Dividend Distribution Tax
There will be no surcharge on companies with less than Rs 1 crore taxable income.
The FM has raised the Dividend Distribution Tax on companies to 15%, and on mutual funds to 25%.
2 per cent interest subvention scheme for short-term crop loans. The scheme will get an additional allocation of over Rs 1,600 crore.
The effective rate of customs duty has been reduced.
The peak rate for non-agricultural products has been brought down from 12.5% to 10%.
The ad valorem component of excise duty on petrol and diesel has been brought down from 8% to 6%.
CST rate reduced from 4 to 3 per cent effective APRIL 1, 2007.
He has raised the exemption for small service providers from Rs 4 lakh per annum to Rs 8 lakh per annum.
Consequently, 2 lakh assessees out of a total of 4 lakh assessees will go out of the service tax net, resulting in a revenue loss of of Rs 800 crore.
Service tax will now be payable on services outsourced for mining of mineral, oil or gas and renting of immovable property for use in commerce or business.
The Budget has introduced a new exchangeable bond instrument. Using this instrument, holding companies can raise money through bonds against shares
He proposes allowing mutual funds to operate dedicated infrastructure funds.