Direct & Indirect Taxes In Union Budget 2011-12 India

Direct & Indirect Taxes 2011

Maintains tax exemption at Rs 1.60 lakh income a year
10% tax on income of Rs 1.6-10 lakh
20% on income over Rs 10 lakh up to Rs 25 lakh
30% on income beyond Rs 25 lakh
All direct taxes including FBT and income tax would be brought under one code.

Corporate Tax rate to be 25% against 30 per cent

Wealth Tax to be levied on wealth over Rs 50 crore

Abolition of Securities Transaction Tax

Re-introduction of long-term capital gains tax

Raising of tax deduction on savings to Rs 3 lakh

Retirement benefits be exempted from tax, only if saved in Retirement Benefits Account.

Budget 2011 should bring about clarity on taxability for lease transactions with respect to the consideration received on such transactions and it should be clarified that only the lease rent is liable to the service tax and not the lease premium.

It is expected that the Central Tax rate could be reduced to 1% from the existing rate of 2%, prior to the introduction of the already delayed GST.

Direct & Indirect Taxes 2010

Limits for Taxable Income : Current slab of Rs.1.6 lakhs for taxable income may be increase to Rs.2.5 lakhs for men

Increase in Gratuity Limit : The gratuity limit at the time of retirement may be increased to Rs.10 lakhs form the current Rs.3.5 lakhs

Decrease in Tax Rates Itself : Highest tax slab will be reduced to 25% only from 30%

Increase in Self Assessment Slab : Self assessment slab is currently at Rs.40 lakhs for professionals and business people. It will be increased to Rs.1 crore

To implement Direct Tax Code from April 1, 2011

Likely roll-back in tax cuts on excise duties

Govt must look at reducing corporate tax rates

Must look for clearer tax reforms in 2011

No impact on Marico since products are tax exempt

Widening of Tax net to include base not taxed earlier

To ensure tax evasion gets more difficult & expensive

Short-term revenue loss must not hold up tax reforms

Reforms needed in property, tax and import procedures

Tax benefits for companies which source from SMEs

States presently tax ATF at varying rates, going up to 16%

Allow power finance companies to float tax free bonds

Increase the income tax slab to drive consumption

Increase tax holiday period from 5 years to 10 years

Make LTC tax free every year vs for 2 years in block

Bring STPIs on par with SEZs on tax benefits

Exempt infra cos from 15% dividend distribution tax

Give a tax holiday to city gas distribution networks

Exempt power companies from 15% distribution tax

Allow power companies to isssue tax-free bonds

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Expectations

Industry

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Inflation budget to drive flows in market.
Peeyoosh Chadda (Edelweiss AMC)

Expect rollout of long-term infra debt fund this budget

PM seeks GST integration in budget
Govt sources

Pre-budget picks: 3 stocks (Rashtriya Chemicals and Fertilisers, Jain Irrigation and Bharat Electronics) that can give you good upside
Rajesh Jain (Independent Market Strategist)

RBI action to move mkts, budget won't alter mood
Religare

Govt may hike tax exemption limit
Inflation impact

See Nifty at 7000; L&T, RIL to lead rally in 2011
Amar Ambani, IIFL

Citizen's

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There should be a reduction in interest rate for education loan...

Divakar

good to see raising of tax exemption limit. The government should..

vijay

The emphasis is on poor and underprivileged and this bodes well for..

ravi kumar

Good average budget, Pranab preferred to err on on the side of..

jackie Singh

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