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Home -> Finance -> Full Story

Highlights of Budget 2005-06 presented by FM
Monday, February 28 2005 16:04 Hrs (IST) - World Time -

New Delhi: Following are the highlights of the Budget 2005-06 presented by Finance Minister P Chidambaram in Parliament today (Feb 28, 2005):

Spotlight: Budget 2005

  • Income upto Rs 1,00,000 per annum exempted from tax.
  • Income between Rs 1-1.5 lakh to be taxed at 10 pc.
  • Rs 1.5-2.5 lakh income to be taxed at 20 pc.
  • Income above Rs 2.5 lakh to be taxed at 30 pc.
  • Exemption level for women at Rs 1.25 lakh.
  • Exemption level for senior citizens at Rs 1.5 lakh.
  • Consolidated limit of Rs 1 lakh of saving to be deducted from income before calculating tax.
  • Standard deduction removed from tax structure.
  • 0.1 per cent tax on withdrawal of over Rs 10,000 in cash from banks on a single day.
  • Payment of electricity bill of over Rs 50,000 a year replaces mobile phone owners in the one-in-six criteria for filing income tax returns.
  • Govt proposes 50 paise per litre cess on petrol and diesel to fund highways.
  • Defence allocation to be increased to Rs 83,000 crore next fiscal.
  • Customs duty on crude petroleum to be cut to 5 pc from10 pc.
  • LPG for domestic consumption and subsidised kerosene not to attract customs and excise duties.
  • Customs duty on motor spirit, high speed diesel and other petroleum products to be lowered to 10 pc from 15-20 pc.
  • Specific rate on cigarettes to be increased by about 20 per cent.
  • Other tobacco products, including gutka, chewing tobacco, saunf and pan masala to attract 10 pc surcharge on ad valorem basis.
  • Fringe Benefits Tax of 30 per cent on benefits collectively enjoyed by employees.
  • Transport services for workers and staff and canteen services in an office, factory exempted from tax.
  • Peak customs duty for non-agricultural products to be reduced to 15 per cent from 20 per cent.
  • Fiscal deficit pegged at Rs 1,51,144 crore or 4.3 per cent of GDP during 2005-06.
  • Revenue deficit proposed to be Rs 95,312 cr or 2.7 per cent of GDP for next fiscal.
  • Plan expenditure is estimated at Rs 1,72,500 crore for 2005-06.
  • Of plan expenditure, Rs 29,003 cr to be raised as loans by State Governments directly.
  • Non-plan expenditure at Rs 370.85 crore for next fiscal.
  • Re 1 per kg surcharge on tea to be abolished.
  • Re 1 per kg excise duty on refined edible oils and Rs 1.25 per kg on vanaspati to be removed.
  • Matches made by mechanised and semi-mechanised sector to pay 12 pc excise duty against the present 16 pc.
  • Securities transaction tax hiked to 0.02 per cent on all categories of trade.
  • Excise duty on imitation jewellery to be cut to 8 pc from 16 pc.
  • 2 pc excise duty on branded jewellery, unbranded exempted.
  • Customs duty on specified capital goods and all inputs for manufacture of IT Agreement bound items to be removed.
  • Countervailing duty of 4 pc on imports of IT agreement bound items, IT software will be exempt.
  • Customs duties on cut flower to be raised from 30 to 60 pc.
  • Customs duty on cloves to be lowered to 35 pc
  • Customs duty on all other agricultural goods to be same.
  • Customs duty on most textile machinery reduced to 10 pc from 20 pc.
  • Customs duties on primary and secondary metals to be cut to 10 pc from 15 pc.
  • Coking coal with high ash content to attract 5 pc customs duty in place of 15 pc.
  • Customs duty on polyester and nylon chips, textile fibres, yarns and intermediates, fabrics and garments to be cut to 15 pc from 20 pc.
  • Service tax to remain at 10 per cent.
  • Domestic companies to pay 30 pc corporate income tax and 10 per cent surcharge.
  • No change in the tax regime for foreign companies.
  • Polyester filament yarn, tyres and air conditioners to attract 16 pc CENVAT against the present 24 pc.
  • CENVAT on motors cars and aerated drinks remain unchanged at 24 pc.
  • Customs duty on 9 specified machinery used in pharma and biotechnology sectors to be cut to 5 per cent.
  • Customs duty on specified parts of battery-operated road vehicles and for printing presses to be lowered from 20 pc to 10 pc.
  • Customs duty on primary and secondary metals to be cut to 10 per cent from the existing 15 per cent.
  • Service providers up to Rs 4 lakh gross turnover to be exempted from service tax.
  • Membership fee of clubs, associations and other services to be in the service tax-net.
  • The rate of depreciation to be 15 pc for general machinery and plant.
  • Initial depreciation rate to be raised to 20 pc.
  • Withholding tax on technical services to be cut to 20 pc from 10 pc.
  • Credit to be allowed for Minimum Alternate Tax.
  • Exemption from tax on agreements to acquire aircraft to aircraft engines on lease to be extended to September 30, 2005.


PTI



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