Highlights of Budget 2012-13: Key Proposals

Finance Minister Mr. Pranab Mukherjee presented his seventh Union Budget for the year 2012-13 on Friday, 16 March 2012 11:00 Am. While commencing his speech, Mr Pranab Mukherjee, FM said that for the Indian economy, this financial year of 2012 was "a year of recovery interrupted" which means that it was time to make tough decisions. So what has Finance Minister proposed in this Indian Union Budget 2012-13.

In Continuation to the post of What's gone up and down:Union Budget 2012-13, Here are some of the key proposals, features & highlights of the Union Budget 2012-13 presented in the Parliament on Friday, 16 March 2012.

#      Fiscal deficits targeted at 5.1 percent of GDP in 2012-13 as against 5.9 percent of GDP in 2011-12;

#      Central Government debt at 45.5 per cent of GDP.   

#      Total Expenditure in 2012-13 budgeted at
14.9 trillion rupees (Rs 14,90,925 crore), up 29 per cent than 2011-12 Budget

#      Plan Expenditure budgeted at 521.25 billion rupees (Rs 5,21,025 crore) in 2012-13, up 18 per cent than 2011-12 Budget

#      Non-plan Expenditure budgeted at 969.90 billion rupees (Rs 9,69,900 crore) in 2012-13.

#      Disinvestment targeted at 300 billion rupees (Rs.30,000 crore) in 2012-13

#      Current account deficit is expected lesser in 2012-13 than 3.6 per cent in 2011-12

#      Economy to grow to 7.6 per cent by 2012-13 as against 6.9 in 2011-12

#      Will bring down subsidy to 1.7 % of GDP in the next 3 years

#      Pilot project for direct transfer of subsidiary for kerosene would be initiated in Alwar, Rajasthan

#      Direct Cash Subsidies to be provided for LPG, Kerosene

#      Qualified foreign investors can participate in bond markets

#      Direct transfer of subsidy to farmers possible hereafter

#      Government to provide for food subsidy and food security act this year.

#      GST may come into action by August 2012

#      A General Anti-Avoidance Rule (GAAR) to be introduced to counter aggressive tax avoidance

#      Income Tax deduction of 50 per cent on investments of up to Rs 50,000 a year in Rajiv Gandhi Equity savings scheme with three year lock-in period

#      Capital gains tax of residential property would be exempted from capital gains if sales proceeds are invested or used in equity or equipment of an SME

#      Income Tax Burden will come down as Personal income tax exemption limit raised from Rs 1,80,000 to Rs 2,00,000; 10 per cent tax slab will be applied for 2 lakhs-Rs 5 lakhs income bracket; 20 per cent tax slab applied for Rs 5 lakhs-Rs 10 lakhs income bracket and 30 per cent tax slab will be applied for income beyond Rs 10,00,000;

#      Service tax rate raised from 10 per cent to 12 per cent to bring in additional revenue of Rs.18,660 crore; School education, though, will be exempt from service tax.

#      Seventeen services exempt from tax net

#      Rs 10000-crore tax fee bonds for power sector

#      The Securities Transaction Tax (STT) has been reduced by 20% from 0.125 percent to 0.1 percent on cash delivery based transactions (while buying and selling shares)

#      Remove cascading effect of dividend distribution tax

#      Indian Cinema industry exempted from service tax on copyright

#      Interest earned from savings bank deposit accounts exempted from tax up to Rs 10,000 p.a

#      No advance tax requirement for senior citizens

#      No change in corporate tax rates

#      Withholding tax on external commercial borrowings has been reduced from 20 per cent to 5 per cent for 3 years on power, airlines, roads, bridges, affordable houses, ports and shipyard, dams and fertiliser sectors

#      Tax exemption on individual share investment below Rs 10 lakh

#      Excise duty hiked to 12 per cent from earlier 10 per cent. Excise duty has been raised on big cars from 22% to 24%..

#      Customs duty on refined imported gold hiked to 3 per cent; Customs duty on imported gold bars, coins hiked to 4 per cent

#      Custom duty slashed on key medicines for treatment of HIV, cancer

#      Government will implement Direct Tax Code (DTC) as soon as possible

#      Proactive steps to be taken on black money to control stas

#      Agriculture credit target to be raised by Rs 1,00,000 crore to Rs 5,75,000 crore. Rs 300 crore for irrigation program

#      Investment in agriculture up by 18%

#      Kisan credit cards can be used at ATMs

#      Defence outlay at Rs 1.95 lakh crore as against Rs 1.64 lakh crore

#      Rs 11,937 crore allocated for mid-day meals at schools

#      National Rural Livelihood Mission is likely to spent Rs 3,915 crore

#      Aviation Section companies can borrow up to US$1billion via External commercial borrowings (ECBs) for working capital requirements

#      Allocation for the national highways programme has been upped by 14 per cent.

#      Rs 15,888 crore for PSU banks, regional rural banks and NABARD

#      Government will be providing Rs 10,000 crore to NABARD for refinancing regional rural banks.

#      6,000 more schools will be set up under the 12th year plan; Rs 25,555 crore allocated for Right to Education

#      8,800 km of national highway roads to be developed in 2012-13.

#      First infrastructure debt fund worth Rs 8,000 crore established

#      Government doubles allocation for tax-free bonds to 600 billion rupees for financing infrastructure projects in 2012-13

#      There would be a tax exemption of up to Rs 5,000 for health insurance for the annual preventive health checkups.

Categories: Tax Planning, Union Budget