Union Finance Minister Pranab Mukherjee on Monday presented the Union Budget 2011-2012 in the Lok Sabha. An overview of the budget estimates for 2011-12 projects Rs 9,32,440 crore - an increase of 24%. Expenditure in 2011-12 is estimated at Rs 12,57,729 crore, an increase of 13.4%. Revenue deficit fixed at 2.3% in revised estimates of 2010-11 and 1.8% in 2011-12. Tax reductions to result in revenue loss of Rs 11,500 crore.
Some of the highlights of the Union Budget are:
No change in tax slabs has been proposed. The tax exemption limit for general category has been raised from Rs 1,60,000 to Rs 1,80,000. For senior citizens, exemption age limit has been reduced from 65 to 60. Their tax exemption limit will be Rs 2,50,000. A new exemption bracket has been created for those above 80 years of age. Their tax exemption limit will be Rs 5,00,000. Surcharge for companies cut to 5%, from 7.5%.
Direct Tax Code to replace the Income Tax Act, will be implemented from April, 2012 and the Goods and Services Tax Bill is to be introduced in Parliament this year.
Service tax rate kept at 10%. Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
A proposal to introduce self-assessment of customs duty wherein importers and exporters will themselves assess payment of duty. Standard rate of central exercise duty will be maintained at 10%. A 1% central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted and there will be no change in CENVAT rates.
Rs 40,000 crore to be raised through disinvestment in 2011-12, FDI policy will be liberalized further.
Tax sops of Rs. 20,000 for investment in Infra bonds.
Credit flows to farmers will be raised from Rs 3.75 lakh crore to Rs 4.75 lakh crores and the allocation under Rashtriya Krishi Vikas Yojana will be raised from Rs 6755 crore in the current year to Rs 7860 crore.