Union Budget 2011 Highlights on Tax

Union Budget 2011 Highlights on Tax

New category of senior citizens above 80 years to get higher IT deduction limit of Rs. 5 lakh from this year

Investment in fertiliser plants and machinery to be treated as infrastructure investment

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.

Govt to allow issue of Rs. 30,000 crore worth of tax-free bonds by infrastructure companies in 2011-12

Tax deduction for investment in infrastructure bonds of Rs. 20,000 extended for one more year Loss on direct tax reliefs at Rs. 11,500 crore; gain on indirect tax changes at Rs. 11,300 crore

Interest subvention on home loans up to Rs. 15 lakh. Mortgage risk guarantee corporation to insure loans to the poor

Cement excise duties will be shifted to valorem basis from specific duty now
Foreign individual investors allowed to invest directly in mutual funds subject to KYC requirements

Government considering extension of nutrient-based subsidy for urea, the largest chunk of fertilisers used in agriculture

Public sector disinvestment target for 2011-12 is raised to Rs. 40,000 crore
Corporate tax surcharge reduced from 7.5% to 5%. Minimum alternate tax rate up from 18% to 18.5%.

Fiscal deficit for 2010-11 seen at 5.1% against 5.5% budgeted; deficit for 2011-12 projected at 4.6% of GDP

FM says no need to remove stimulus package at this stage, but will withdraw excise exemptions

Senior citizens to get higher IT deduction limit of Rs. 2.5 lakh. Entitlement age reduced to 60 from current 65

Priority sector home loans limit raised to Rs. 25 lakh from Rs. 20 lakh.

Centre’s net borrowing figure for 2011-12 fixed at Rs. 3,43,000 crore; fiscal deficit figure at Rs. 4,12,000 crore

Government to introduce direct cash payments for those entitled to subsidies in kerosene, cooking gas and fertiliser by March, 2012.

Excise exemptions withdrawn on 130 items; to pay minimum excise of 1% from next year
Service tax levels and excise stay at 10%; Peak rate of customs duty remains unchanged

National mission for electric and hybrid vehicles to be set up to create environment-friendly automobiles