Well, Budget 2007-2008 presented on Feb 29, 2008 by our Hon. Finance Minister Shri. P.Chidambaram saw many twists and turns. Many economists had to say this as a political budget and some declared it as a "aam aadmi ka budget". But in my point of view, this budget was a kind of balancing act done by our Finance Minister. Increasing the B.E.L in the Income Tax to 1.5 Lacs, No effects on the corporate tax rate structure were some of the moves which made the Budget felt an aam aadmi budget. On the other hand, giving a statement that "I want retail investors to stay long in the market rather than short", Chidu also had in mind the fluctuation which the stock market is facing. Saying this he hiked the STCG tax rates to 15%, an hike of 5%. But the increase in this rates saw the Bombay Stock Exchange index SENSEX fell upto 7% for the next two working days. On the same note by waiving of Rs.60000 Crore of all the small and marginal farmers, certainly that showed a poilitical move. Following are some of the key highlights of Budget 2007-2008.
2. One time Settlement (OTS) scheme for other farmers for all loans that were overdue for the same period; rebate of 25% against payment of the balance of 75% under OTS.
3. Rs.3780 Crore multi-sectoral development plans for 90 minority concentration districts.
4. National Program to be launched for the elderly.
5. Mid-day meal scheme to be extended to upper primary classes in all blocks.
6. 6000 high quality model schools to be opened.
7. 3 IITs in Andhra Pradesh, Bihar and Rajasthan and 16 central universities to be established.
8. Rs.750 crore allocated for upgrading 30 ITI’s
9. Allocation under Indira Gandhi Old Age Pension Scheme up from Rs.2392 crore to Rs.3443 crore.
10. Equity, loan support to Central PSUs
Direct Taxes:
New Income Tax Slabs:
0-150000 - NIL
150000-300000 - 10%
300000-500000 - 20%
Above 500000 - 30%
1. Exemption Limit for women hiked to Rs.1.8 Lakh
2. For Senior Citizens, limit up to Rs.2.25 Lakh
3. No Change in Corporate tax and surcharge
4. Banking Cash Transaction tax goes.
5. 125% weighted deduction on payments for outsourced research.
6. Tax on Short Term Capital Gain hiked to 15%
7. Commodities transaction tax introduced
8. Creche Facilities, guest houses off FBT
9. Senior Citizen Saving Scheme 2004, Post Office Time Deposit Account come under Section 80C
10. 5 Year Tax holiday for new hospitals in Tier- II and Tier – III towns
11. Reverse Mortgage stream of revenue received by senior citizens not considered income
12. 150% deduction on R&D expenditure of seed producers and farm implements manufacturers
Indirect Taxes:
1. Cenvat rate reduced from 16% to 14%
2.Excise duty on 2, 3 wheelers cut by 12%
3.Excise duty in small cars down to 12%
4. Excise duty on buses, chassis cut to 12%
5. No excise duty on coconut water, tea, coffee mixes and puffed rice
6. Breakfast cereals to cost less, non- filter cigarettes to cost more.
7. Anti-AIDS drug off excise net.
8. Excise duty on Pharmaceutical product slashed.
9. Duty on some writing, printing paper cut.
10. Service Tax Net widens.
11. No change in peak rate of customs duty
12. Customs duty on certain life saving drugs cut.
13. No import duty on steel, aluminum scraps
14. Customs duty on project imports cut
15. No customs duty on bactofuges
16. No import duty on rough cubic zirconia
17. Duty on polished cubic zirconia cut from 10% t0 5%.
18. Select parts of set top boxes off custom duty.
Enjoy,
Piuesh Jain
