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Hi..i am professional CA..and a new member of Maayboli
This thread is created to discuss about current budget and to solve your queries regarding that..
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And here some useful information:
Chidambaram pegged the total expenditure for 2005/06 at Rs 5,14,344 crore and total revenue collections at Rs 3,51,200 crore.
The revenue expenditure was put at Rs 4,46,540 crore. He pegged revenue deficit for 2005/06 at Rs 95,312 crore, 2.7 per cent of GDP.
The fiscal deficit for 2005/06 was put at Rs 1,51,144 crore, 4.3 pc of GDP.
* Direct tax proposes to yield an additional Rs 6,000 crore a year and indirect duty proposals are broadly revenue neutral.
* Import duty on cooking coal reduced from 15 to 5 pc.
* Two anti-tax evasion measures announced to check black money generation.
0.1 pc tax will be levied on withdrawal of cash of Rs.10,000 and above from banks on a single day.
There will be no amnesty scheme for black money.
* One by six schemes for filing of income tax returns amended by removing mobile telephone from the list but payment of electricity bill of Rs 50,000 per annum to be included.
* Corporate income tax for domestic companies reduced to 30 pc. The ten per cent surcharge continues.
Minimum Alternate Tax will continue.
100 pc tax deduction for companies carrying out scientific research.
Exemption of withholding tax (WHT) on leasing of aircraft or aircraft engines from foreign companies extended till September 30 this year, following request from Air India and Indian Airlines.
Security transacion tax raised from 0.15 pc to 0.2 pc.
* Six exemptions including interest payments on housing loan on self-occupied and medical insurance premium will be continued.
* Conveyance and canteen allowance to be outside the tax net but all other perks given by employers to employees as a collective benefit will be taxed at 30 pc. This new tax will be called Fringe Benefit Tax and will be levied on employers.
* Tax bracket altered. New Tax brackets. Income upto Rs 1 lakh nil across the board.
Income between Rs 1 lakh and 1.5 lakh will attract 10 pc and Rs.1.5 lakh to Rs.2.5 lakh - 20 pc and beyond Rs.2.5 lakh -30 pc.
Threshold level for women Rs 1.25 lakh and for senior citizens Rs 1.5 lakh.
Standard deduction removed.
Rs 1 lakh consolidated exemption limit will be allowed to all tax payers before computing taxable income.
Section 80 L removed.
10 per cent service charge will be applicable on income beyond Rs.10 lakh instead of present Rs.8.5 lakh.
Chidambaram said these measures will benefit all sections of income tax payers.
* No reduction in excise duty on auto and aerated water which will continue to attract 24 pc duty.
* Service tax rate has been retained.
* Excise on some petroleum products including motor spirit and diesel reduced to ten per cent from 15 and 20 pc respectively.
* Chidambaram abolished one pc surcharge on tea and rupee one per kg surcharge on edible oil.
* Cess on petrol and diesel has been raised by 50 paise which will be exclusively earmarked for national highway development programme.
* Specific excise duty on cigarettes has been raised by ten per cent.
Another ten per cent ad valorem will be levied on tobacco products including gutka and chewing tobacco.
* Peak Custom duty rates on non-agricultural products reduced from 20 to 15 per cent in line with India's East Asian neighbours
* Refrigerator duty down from 20 to 10 per cent.
* Plan expenditure for 2005/06 put at Rs 1.72,000 crore as against Rs 1,43,000 crore in the current year.
The increased sum would be raised as loans for state governments.
Non plan expenditure gone up to Rs 3,73,800 crore mainly due to 12th Finance Commission recommendations.
* Revenue deficit estimated at Rs 95,312 crore and fiscal deficit at Rs 1,51,144 crore.
Revenue deficit put at 2.7 per cent of GDP and fiscal deficit at 4.5 per cent of GDP for 2004/05.
* Decentralised procurement policy to be adopted in certain parts of the country as part of the efforts to rationalise food subsidy.
* Government to restructure the subsidy regime in a cautious manner in consultation with all concerned. The subsidies on food, fertilisers and petroleum products to continue.
* Defence Budget to be increased to Rs 83,000 crore in 2005-06 which includes Rs 34,300 crore for capital outlay.
This alllocation is against the current year's revised expenditure of Rs 76,000 crore.
* VAT to be implemented from 1st April, 2005.
* Twelfth Finance Commission's recommendations would cost the exchequer Rs 26,000 crore in 2005-06.
* Indian Institute of Science, Bangalore, to be made world class university for which one time grant of Rs 100 crore proposed.
* Government to rationalise stamp duty for commercial papers to bring them to international standards.
* SEBI to be asked to study gold trading
* Finance Minister proposed to constitute high power experts committee in consultation with RBI to make Mumbai a regional financial centre.
* RBI Act of 1934 to be amended to provide flexibility to monetary policies, particulary on SLR and capital adequacy ratio.
* To strengthen capital market, Chidambaram authorised SEBI to set up a national institute for teaching and training people in securities and to permit FIIs to provide collaterals on trading and derivatives.
He also proposed to amend the definition of security to provide for legal framework for dealing in it
* RBI will prepare a roadmap for banking sector reforms and the Government will introduce a comprehensive amendment to the Banking Regulation Act.
The roadmap will aim at improving competition among nationalised banks as India's top bank SBI ranks only 82 in the world in terms of business.
* A National Urban Renewal Mission launched with an outlay of Rs.5500 crore in 2005-06 aimed at improving seven mega cities and other cities with over one million population.
This would have a grant component of Rs.1650 crore.
* A Special Purpose Vehicle to be set up for viable infrastructure projects in roads, ports and airports.
Some of these projects were not taking off because of lack of funds though being viable. The purpose of SPV is to tackle this, Chidambaram said.
* Allocation for Indira Awaas Yojana has been increased from Rs 2200 crore to Rs 2750 crore to build an additional 15 lakh houses.
For rural electricification a sum of Rs 1100 crore is being allocated.
* Rs.1400 crore provided in 2005-06 for creation of 4000 km of four-lane highways which would be apart from the Golden Quadrilateral and North-South East-West corridor under National Highway Development programme three.
Special package for north eastern states approved.
* BSNL would provide VPT connections to remaining 66,822 villages in the next two years, with 5.2 lakh VPTs being installed already.
* Expressing concern over low teledensity in the country, the Finance Minister said Rs 1,700 crore were granted to the universal service obligation (USO) fund last fiscal. An amount of Rs 1,200 crore is being allocated to it this year.
* Government sets ambitious merchandise export target of 150 billion dollars by 2009 and would further liberalise trade policy
* Chidambaram announced ten per cent capital subsidy for the textile sector.
The allocation for Rs 25,000 crore technology upgradation fund has been increased by Rs 435 crore.Rs 20,000 crore has already been spent by the textile industry to meet challenges of post quota regime. It is to go up to Rs 30,000 crore in the near future.
He announced a manufacturing competitiveness programme to improve the small scale and medium sized manufacturing industries. He also announced Rs 40 crore for modernisation of 20 clusters of handloom manufacturers.
* Recommendations of the Tuteja Committee Report on Sugar industry accepted by Government and a financial package for revival of sugar factories with a two-year moratorium having regard to their commercial viability announced.
This will be applicable to sugar factories which were operational during 2002-03 sugar season.
* Knowledge centres would be set up following recommendations of the National Commission for Farmers under the Mission 2007, Chidambaram said.
* Government to provide full support to IRDA for encouraging micro-insurance which is proposed to be carried out by NGO, Self-Finance Groups and Micro-Finance Institutions.
* RBI asked to open window for qualified NGOs to tap ECB route for micro finance.
* Task force's recommendations on reforming cooperative banks have been accepted.
The main features of the recommendations are restructuring of the accumulated debt and changes in legal framewoork to enable RBI to enforce prudential norms and strengthen the capital base of these cooperative banks.
* The National Agriculture Insurance Scheme will be extended for Kharif and Rabi season of 2005/06.
* Rural RRBs and cooperatives will be asked to extend agricultural credit by another 30 per cent to Rs 1.08500 crore in the current year.
* Rs 400 crore provided for stepping up micro-irrigation comprising drip and sprinkler irrigation. So far 1.2 million hectares have been covered by micro irrigation in the country which is to be stepped up to 3 million hectares by the end of the 10th plan and 14 million hectares by the end of 11th plan.
* This is being done on the basis of Task Force report submitted recently.
* An additional Rs 52 crore will be allocated for Farakka Barage.
* A plan out of Rs 180 crore fund will be set up for flood control and erosion in Eastern parts of UP, Bihar, West Bengal, Orissa and North-East on account of floods in Bramaputra and Ganga.
* Pilot project to improve water bodies to be taken up at a cost of Rs 100 crore.
* A massive tea plantation and rejuvenation scheme will be taken up.
* To improve the plantation sector, government has set up a committee to modify the price stabilisation fund which has proved to be ineffective.
* National Horticulture Mission to be launched on April 1
* Agriculture diversification to cover fruits, vegetables, poultry, diary, pulses and oilseeds.
* The proposal is to provide additional one crore hectare of irrigation, construct 60 lakh houses for poor, connect all villages with 1,000 population in plains and 500 in hilly areas with roads, drinking water to 74,000 remaining habitatations and electricity for 1,25,000 remaining villages and telephone connectivityy to 66,822 villages.
* Launching Bharat Nirmal Programme to give a new deal to rural India, Chidambaram announced the budget would lay stress on development of six areas -- irrigation, roads, water supply, rural electrification, housing and rural connectivity.
* Equity support of Rs 14,040 crore and Rs 3,554 crore for Central PSUs including Railways.
* 60 lakh additional houses for the poor.
* For Jammu and Kashmir, the state plan has been fixed at Rs 4,200 cror
* Bihar has been identified for special grant for health and education.
* Rs 450 crore provided for Highway Development in North East.
* Udhampur-Baramulla rail section to be completed on a priority basis.
* Twelfth Finance Commission has provided Rs 7,975 crore for 2005-10 for development of backward regions in Bih
* An allocation of Rs 5,000 crore for backward regions grant fund for 2005-06 and this allocation will continue for next four years.
* Funds to be provided for minority community meritorios candidates appearing in competitive exams
* Central assistance for recruitment and posting of Urdu teachers in primary and upper primary schools where majority of students speak that language.
* There will be greater credit flow for urban poor.
* Largesse scholarships to be provided for SC/ST students in select top class institutes, details of which would be announced shortly.
* Observing that only 30 per cent of rural people enjoyed safe sanitation, Chidambaram said the scheme to provide proper sanitation facilities to all districts would get an allocation of Rs 630 crore this year.
* For Rajiv Gandhi drinking water mission, the allocation has been increased to Rs 4,750 crore in 2005-06 from Rs 3,300 crore in the current year.
* For midday meal scheme covering 11 crore children, the budget estimate for the new year is increased to Rs 3,010 crore from Rs 1,675 crore in budget estimate for the current year.
* Special plan assistance to Jammu and Kashmir. State Plan hiked from Rs 3,008 crore to Rs 4,200 crore. Baglihar Hydel Project which was given Rs 300 crore last year would be given adequate funds next year.
* For Sarvashikha Abhiyan, the allocation has been raised to Rs 7,156 crore.
* Fertiliser subsidy has been pegged at Rs 16,254 crore while allocation for rural development is put at Rs 18,334 crore for 2005-06.
* Six AIIMS-type medical institutions will start in different parts of the country in the near future, Chidambaram said.
* He announced the national rural health mission will be launched next fiscal.
* Outlining efforts of government to push up employment, Chidambaram said food processing is generating 2.5 lakh additional jobs, textiles 1.2 crore jobs, IT 70 lakh jobs by 2009 and construction industry lakhs of additional jobs in the face of industrial boom in the country.
* Two thousand fellowships will be awarded under Rajiv Gandhi National Scholarship scheme for Scheduled Castes and Scheduled Tribes for pursuing courses like M. Phil and Ph. D.
* In the current year, the budget estimate was Rs 87,896 crore.
* Support for Central plan in the new financial year will be Rs 1,10,385 crore which, Chidamabram said, was very substantial and represent an unprecedented increase of over 25 per cent.
* In the current year, it was originally fixed at 1,45,590 crore to which an additional Rs 2,000 crore was done.
* Gross budgetary support for plan during 2005/06 has been fixed at Rs 1,72,500 crore, an increase of 16.9 per cent over the current year's figure.
* The Antodya Anna Yojana Scheme coverage is being increased from two crores families to 2.5 crore families below poverty line.
* The allocation for the health sector has been increased to Rs 10,280 crore for 2005-06 as against Rs 8,420 crore in the current year.
* National Rural Health Scheme to be launched in the new fiscal.
* As against the target of 1.85 lakh self help groups, the government has already achieved 2.26 lakh such groups as part of efforts to tackle poverty and unemployment.
* As against the target of Rs 1.05 lakh crore of Agricultural credit this fiscal, as much as Rs 1,08500 crore was disbursed.
* In the space of nine months, "We have risen to challenges as outlined by the National Common Minimum Programme", Chidambaram said.
* Allocation for rural development would be Rs 18,334 crore.
* Inflation stood at 8.5 per cent on August 28 last year.
* Inflation has been reined at 5.01 per cent as of February 12, one per cent less than what it was in the corresponding period last year, Chidambaram said.
* The economy had to face excess liquidity overhang which spilled into 2004/05 and an inflationary build up because of oil prices increase, deficit in southwest monsoon and a decline in business confidence, he said.
* Despite high economic growth, there were several disturbing trends during 2004 when the UPA government came to power, Chidambaram said.
* Growth rate in current year is estimated to be 6.9 per cent.
* Planning Commission has drawn up Tsunami relief programme costing Rs 10,260 crore. So far, Rs 3,644 crore have been provided for Tsunami relief
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Hemantp
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| | Tuesday, March 01, 2005 - 9:16 am: | 
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I have some queries.
1) Can I continue getting benefit for housing loan (Interest and Principal)?
2) Section 88: What happened to them?
3) What about PPF? Are there changes?
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Arun
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| | Tuesday, March 01, 2005 - 9:44 am: |
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Hemant: As per my knowledge, trying to give answers of your questions
1. housing loan (interest and principal)
Yes you will. No changes in that.
2. Section 88:
I am not sure about it. I usually get confused between sec 80 and sec 88.
3. PPF: no benefits asto 20 % rebate on investment, but whatever you invest in PPF (to the limit of 1,00,000) will be exempted from tax
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Sunilt
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| | Tuesday, March 01, 2005 - 10:04 am: |
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A$NaÊ malaa vaaTto 1 laaK hI maximum r@kma AsalaI trI PPF caI mayaa-da 70000 ca Aaho
]rlaolao 30000 tumhI dusaáyaa kuzlyaa yaÜjanaot gauMtvaU Xakta ]da. myaucyauAla ÔnD .
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Hemantp
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| | Tuesday, March 01, 2005 - 10:21 am: |
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PPF caI mayaa-da 70Ê000 hÜtI. Ajaunaih tIca Aaho ka ?
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Gandhar
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| | Tuesday, March 01, 2005 - 12:07 pm: |
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hi Hemant,
As Arun said, for housing loan benefits there is no change.
Rebate under section 88 is also continued. (Investments in LIC, PPF comes under this section.)
If the gross total is less than 1,50,000, income rate is 20%. In between 1,50,000 to Rs.5,00,000, income rate is 15% and above 5,00,000, there is NIL benefit. *** Please correct if the figures are wrong.***
For PPF 70,000 is maximum limit. Rest 30,000 you can invest into infrastructure bonds like IDBI Flexi bonds, ICICI safety bonds etc.
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Aj_onnet
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| | Tuesday, March 01, 2005 - 1:29 pm: |
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homaMtÊ
Aata ppf caI 70000 caI mayaa-da naahI.
AapNa iktIhI r@kma kÜNa%yaahI scheme maQyao
³ as specified in new 80C ´gauMtvaU XaktÜ.
pNa %yaatIla jaastIt jaast 100000 Épyao ho tax benefit saazI laxaat Gaotlao jaatIla. AaiNa tI sava- r@kma Aaplyaa ]%pÙatuna vajaa kolyaanaMtr tax calculate kolaa jaala. kÜNatahI rebate imaLNaar naahIÊ tr ekuNa income maQauna gauMtvaNaukIevhZ\yaa rkmaocao deduction imaLola.
AapNa LIC, NSC, Post schemes, ELSS , ppf (a pOkI kÜNa%yaahI scheme maQyao iktIhI Épyao gauMtvaU XaktÜ. pNa (a sava- gauMtvaNaukImaQauna jaastIt jaast ek laaK ev*ZIca vajaavaT
imaLu Xakto.
puvaI- irbaoTsaazI Asalaolyaa jaastIt jaast gauMtvaNaukIcyaa mayaa-da ³jasao ELSS : 10000, pension scheme: 10000, NSC+LIC+PPF+post+ house loan princip: 70000 ´Aata kaZuna TakNyaat Aalyaa Aahot.
gaMQaarÊ
tu saaMgat Asalaolao inayama 2004 to 2005 saazI hÜto. navyaa Aqa-saMklpanao to r_ kolao Aahot.
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Hemantp
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| | Tuesday, March 01, 2005 - 2:26 pm: |
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Aj_onnet: PPF var mayaa-da naahI ? this is great news !!! roT cao kaya ?
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what aj_onnet told is correct. as deduction will be allowed upto 1 00 000 there is no question of rate.
comparison of earlier 88 and new 80 C
if earlier your income was taxed in 30% slab then u were getting 20% rebate on investments.
Now as 80C deducts amount of investment directly from income brefore calculating tax, it saves your tax.
for people who had income in the tax slab of 20% (i e upto Rs. 150 000) will not have any difference as rebate rate and tax rate was same at 20%.
PLease raise more queries if needed, i may help you in my limited knowledge..
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Maitree
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| | Tuesday, March 01, 2005 - 8:40 pm: |
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Óilala ilank pahiva
*<pocaÜnaÜimaictmaosa.[indAitmaosa^AÜmbaud\gaot2005XaÜva1036460^msa
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Maitree
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| | Tuesday, March 01, 2005 - 9:07 pm: |
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I Think the following link will answer the all qustion raised .
http://economictimes.indiatimes.com/budget2005show/msid-1037462,curpg-1.cms
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Somesh
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| | Wednesday, March 02, 2005 - 4:44 am: |
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A lot of noise raised on the tax of 0.1% if you withdraw 10000 Rs in a day. FM might raise this limit to 50000. this is under consideration after a hell of noise on this issue.
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Badbadi
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| | Wednesday, March 02, 2005 - 5:33 am: |
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check this...simple one
http://in.rediff.com/getahead/2005/mar/02tax.htm
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Yogibear
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| | Wednesday, February 28, 2007 - 2:41 pm: |
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Budget - Quick Update .. .. ..
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