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Recent
Updates....
Indian Budget 2008 - 2009 Highlights
Direct
Tax
Direct
Tax Rates for Individuals
Up to Rs.150,000 NIL
Rs.150,001 to Rs.300,000 10 per cent
Rs.300,001 to Rs.500,000 20 per cent
Rs.500,001 and above 30 per cent
• in the case of a woman assessee, from Rs.145,000 to Rs.180,000;
• in the case of a senior citizen, from Rs.195,000 to Rs.225,000.
No change in the corporate income tax rates.
No change is proposed in the rate of surcharge.
Senior Citizens Savings Scheme 2004 and the Post Office Time Deposit Account
to Section 80C of the Income Tax Act.
Additional deduction of Rs.15,000 under Section 80D to an individual who pays
medical insurance premium for his/her parent or parents.
Tax income arising from saplings or seedlings grown in a nursery is exempt.
Weighted deduction of 150 per cent on any expenditure on in-house scientific
research and business of production of seeds and manufacture of agricultural
implements.
Weighted deduction of 125 per cent on any payment made to companies engaged
in research and development.
Crèche facilities, sponsorship of an employee-sportsperson, organising
sports events for employees, and guest houses will be excluded from the
purview of FBT.
Dividend
Distribution Tax (DDT) - parent company can to set off the dividend received
from its subsidiary company against dividend distributed by the parent
company, provided that the dividend received has suffered DDT and the parent
company is not a subsidiary of another company.
Five year tax holiday to Hospitals setup anywhere in
India, except certain specified
urban agglomerations, the hospitals must commence operations between April 1,
2008 to March 31, 2013.
Five year tax holiday from income tax to two, three or four star hotels that
are established in specified districts which have UNESCO-declared 'World
Heritage Sites'. The hotel should be constructed and start functioning during
the period April 1, 2008 to March 31, 2013.
Coir Board will be included in Section 10(29A) and exempt from income tax.
Short term capital gains under Section 111A charged at 15%.
STT paid will be treated like any other deductible expenditure against
business income. (At present, Securities Transaction Tax (STT) paid is
allowed as a rebate against tax liability). There will be no change in the
present rates.
New Commodities Transaction Tax (CTT) on the same lines as STT on options and
futures.
Entities carrying on regular trade, commerce or business or providing
services in relation to any trade, commerce or business and earning incomes
excluded from the definition of "Charitable Services".
Banking Cash Transaction Tax (BCTT) – withdraw with effect from April
1, 2009.
Indirect
Taxes
Customs
Duties
No change
in the peak rate of customs duty.
Reduce the customs duty on Project Imports from 7.5 per cent to 5 per cent. 4
per cent special CVD on a few specified projects in the power sector.
Reduced the duty on steel melting scrap and aluminium scrap from 5 per cent
to nil.
On certain specified life saving drugs and on the bulk drugs used for the
manufacture of such drugs, reduced the customs duty from 10 per cent to 5 per
cent as well as to totally exempt them from excise duty or countervailing
duty.
In order to reduce the cost of manufacture of cattle and poultry feeds, I
propose to reduce the duty on vitamin premixes and mineral mixtures from 30
per cent to 20 per cent and on phosphoric acid from 7.5 per cent to 5 per
cent.
The duty on bactofuges will be reduced from 7.5 per cent to nil. This will
increase the shelf life of milk and benefit the dairy industry.
Fully exempt from duty specified parts of set top boxes and specified raw
materials for use in the IT/electronic hardware industry.
Reduce the duty on specified machinery manufacturing sports goods from 7.5
per cent to 5 per cent. Exempt from duty specified raw materials for sports
goods.
Gem and jewellery industry - Exempt from duty rough cubic zirconia and to
reduce the duty on polished cubic zirconia from 10 per cent to 5 per cent.
Similarly, the duty on rough coral will be reduced from 10 per cent to 5 per
cent.
No duty on helicopter simulators.
Reduced the customs duty on crude and unrefined sulphur from 5 per cent to 2
per cent.
Withdraw the duty exemption on naphtha for use in the manufacture of polymers
and subject it to the normal rate of 5 per cent. However, naphtha imported
for the production of fertilisers will continue to be exempt from import
duty.
Excise Duties
Reduce the general CENVAT rate on all goods from 16 per cent to 14 per cent.
• reduce the excise duty on all goods produced in the pharmaceutical sector
from 16 per cent to 8 per cent;
• reduce the excise duty on buses and their chassis from 16 per cent to
12 per cent;
• reduce the excise duty on small cars from 16 per cent to 12 per cent
and on hybrid cars from 24 per cent to the general revised rate of 14 per
cent;
• reduce the excise duty on two wheelers and three wheelers from 16 per
cent to 12 per cent; and
• reduce the excise duty on paper, paper board and articles made there
from manufactured out of non-conventional raw materials by units not having
an attached bamboo/wood pulp making plant from 12 per cent to 8 per cent with
a further reduction on clearances up to 3,500 MT from 8 per cent to nil.
Furthermore, excise duty on certain varieties of writing, printing and
packing paper will be reduced from 12 per cent to 8 per cent.
Reduce the excise duty from 16 per cent to nil on a few items
including composting machines, wireless data cards, packaged coconut water,
tea and coffee mixes, and puffed rice.
Reduce the excise duty from 16 per cent to 8 per cent on a few items
including water purification devices, veneers and flush doors, sterile
dressing pads, specified packaging material, and breakfast cereals.
Totally exempt from excise duty the anti AIDS drug, Atazanavir, as well as
bulk drugs for its manufacture.
Exempt from excise duty, on end-use basis, refrigeration equipment
(consisting of compressor, condenser units, evaporator etc) above 2 TR (tonne
refrigeration) utilising power of 50 KW and above.
Bulk cement will now attract excise duty of Rs.400 per Metric Tonne or 14 per
cent ad valorem, whichever is higher. Cement clinkers will be liable to
excise duty of Rs.450 per Metric Tonne.
Increase the excise duty on packaged software from 8 per cent to 12 per cent
to bring it on par with customised software which will attract a service tax
of 12 per cent.
Tax both filter and non-filter cigarettes on par by applying higher rates.
Specific duty of Rs.14.35 per litre on unbranded petrol and Rs.4.60 per litre
on unbranded diesel. There will be no impact on retail prices.
Excise duty of 1 per cent on cellular mobile phones.
Service Tax
Propose to bring under the service tax net four services. They are:-
(i) asset management service provided under ULIP, to bring it on par with asset
management service provided under mutual funds;
(ii) services provided by stock/commodity exchanges and clearing houses;
(iii) right to use goods, in cases where VAT is not payable; and
(iv) customised software, to bring it on par with packaged software and other
IT services
money changers, persons running games of chance, and tour operators using
contract carriage vehicles are liable for service tax (only for
clarification).
Threshold limit of exemption for small service providers will be increased
from Rs.8 lakhs per year to Rs.10 lakh per year.
For more information on India Budget, Please
visit :
Union Budget (India) 2008 –
2009, Economic Survey 2007 – 2008
Accounting/Auditing -
International
Accounting/Auditing - India
Legal Updates - India
The
Taxation Laws (Amendment) Act, 2007 - An Act further to amend the Central Sales Tax Act,
1956 and the Additional Duties of Excise (Goods of Special Importance) Act,
1957 - read more
The
Petroleum and Natural Gas Regulatory Board Act, 2006 - An Act to provide for the establishment
of Petroleum and Natural Gas Regulatory Board to regulate the refining,
processing, storage, transportation, distribution, marketing and sale of
petroleum, petroleum products and natural gas excluding production of crude
oil and natural gas so as to protect the interests of consumers entities
engaged in specified activities relating to petroleum - read more
The
Food Safety and Standards Act, 2006 - An Act to consolidate the laws relating to food
and to establish the Food Safety and Standards Authority of India -
read more
The
National Commission For Minority Educational Institutions (Amendment) Act,
2006
Right to establish a Minority Educational Institution.Any who desires to establish
a Minority Educational Institution may apply to the Competent authority
certificate for the said purpose - read more
The
Scheduled Tribes And Other Traditional Forest Dwellers (Recognition Of Forest
Rights) Act, 2006 - An Act to recognise and vest the forest rights and
occupation in forest land in forest dwelling Scheduled Tribes and other
traditional forest dwellers -
read more
The Prohibition Of Child Marriage
Act, 2006 -
An Act to provide for the prohibition of solemnisation of child
marriages and for matters connected therewith
- read more
The
National Rural Employment Guarantee Act, 2005 - An Act to provide for the
enhancement of livelihood security of the households in rural areas of the country
by providing at least one hundred days of guaranteed wage employment in every
financial year - read more
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