Union Budget 2006-07 highlights
The following are the broad highlights of the Union Budget proposals presented by the
Finance Minister Mr. P. Chidambaram today in the Parliament:
1) First of all the good news: No changes in personal tax rates or corporate tax rates: The income tax slabs and rates stay as in the previous year 2005-06.
2) No new taxes imposed.
3) 1 by 6 scheme for filing the income tax returns abolished.
4) Limit of Rs. 10,000/- under Section 80CCC (Pension Fund) removed and included in the overall cap of Rs. 1 lakh under section 80C.
5) Securities Transaction Tax increased by 25%
6) No change in education cess etc.
7) Service tax rate increased to 12% from 10%
8) 8 more new services brought under the service tax net.
9) LPG prices to be reviewed.
10) Excise on cigarettes increased by 5 %
11) Fixed deposits in banks for minimum 5 years included in section 80C limit.
12) Banking Cash Transaction Tax: continued as it is.
13) FBT: tour & travel expenses: valuation at 5% instead of 20%.
14) Superannuation of above Rs. 1 lakh per annum to be included under FBT.
15) 8% excise duty imposed on packaged software sold over the counter.
16) Aerated drinks: excise duty reduced from 24% to 16%.
17) Set top boxes: Excise duty increased by 5%.
18) Excise duty reduced on footwear, ice creams and condensed milk, packaged foods, fast foods.
19) Deblocking of coal reserves good for power generation cos.
20) Allocation of 4 mega projects by 2006 good for power generation cos.
21) Addition of 15000 MW capacity by 2007 is a
positive for power stocks
22) Extension of tax holiday deadline to
benefit Power companies.
23) Imposition of excise duty on computers @ 12% likely to hit the sector
24) Rs 1500 cr outlay for telecom to benefit telecom cos
25) Imposition of excise duty @ 8% on packaged software negative for IT
26) Higher textile upgradation fund positive for textile sector
27) Higher textile upgradation fund positive for textile sector
28) Thrust on farm sector positive for fertiliser companies
29) Priority status to food processing positive for food processing cos
30) Sops for apparel parks to benefit textile cos
31) Rs 10500 cr to telecom sector to increase connectivity
32) Excise Duty on small cars reduced to 16% from 24%
33) E.D. on man made Yarns reduced from 16 to 8%
34) Customs on Life saving drugs reduced from 15 to 5%
35) Customs on alloy and steel reduced from 10 to 7.5%
36) Higher farm credit adverse in long-term for banks
37) Special tea fund positive for Tea
38) Tax rationlisation for gems & jewellery to boost exports
39) Rural Agri & financing focus positive for Auto
40) More FDI in infra to benefit cement, power, steel
41) Higher TUF allocation to benefit textile sector
42) Focus on tourism to help hospitality sector
43) Refinery sector to get boost - Will promote FDI
44) Policy Rationalisation to benefit Telecom Players
45) Focus on tourism to help hospitality sector
46) Focus on tourism to help hospitality sector
47) Focus on tourism to help hospitality sector
48) Farm credit to increase to 1,75,000 cr.
49) Farm credit to increase to 1,75,000 cr.
50) Addition of 5000MW to benefit power sector
51) Focus on Irrigation will benefit fertiliser sector
52) Expected 10% GDP growth to benefit cement and construction companies