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New Delhi: Tax
relief to individuals, promise to curb black money, major push on
infrastructure, capital market reforms and huge subsidy cut were
among proposals listed by Finance Minister Pranab Mukherjee in the
federal budget for 2012-13.
The proposals will give some direct tax relief to individuals,
even as eating out, buying luxury cars, air travel, availing some
professional services and investing in gold jewellery will become
costlier.
Presenting his 7th budget in the Lok Sabha Friday, the finance
minister said the exemption limit for personal income tax was
being enhanced from Rs.1,80,000 to Rs.2,00,000, even as the limit
for peak rate was being raised to Rs.10,00,000 from Rs.8,00,000.
"This will provide tax relief of Rs.2,000 to every tax payer," the
finance minister said, adding: "My proposal on direct taxes will
result in a revenue loss of Rs.4,500 crore."
He also announced new tax slabs under which incomes up to
Rs.2,00,000 would be totally exempt, levy 10 percent for
Rs.2,00,000 to Rs.5,00,000, then 20 percent for Rs.5,00,000 to
Rs.10,00,000 and 30 percent for incomes above Rs.10,00,000.
For the corporate sector, he said, while the tax rates were
remaining unchanged, he assured cheaper access to funds for
expansion, even as he tinkered with the excise rates and customs
duties for specific items.
He proposed to raise the service tax rate to 12 percent from the
present 10 percent.
In the speech, which started exactly at 11 a.m. and lasted 110
minutes, Mukherjee listed a slew of proposals that ranged from
social welfare schemes and incentivising industry to fiscal
consolidation and sector-specific reforms.
Assuring further liberalisation of capital markets, he announced a
new equity savings scheme to extend income tax deduction of 50
percent to those who invest up to Rs.50,000 in equities and whose
annual income is less than Rs.10 lakh.
The finance minister started his speech with the cascading effect
of the global slowdown on India, but yet assuring people that
there were clear signs of a recovery which should see the country
grow at 7.6 percent in 2012-12, against 6.9 percent this fiscal.
"The global crisis has affected us. India's gross domestic product
(GDP) is expected to grow at 6.9 percent in 2011-12, after having
grown at 8.4 percent in each of the two preceding years," the
finance minister said.
"Though we have been able to limit the adverse impact of the
slowdown in our economy, this year's performance has been
disappointing. But it is also a fact that in any cross-country
comparison, India still remains among the front-runners in
economic growth."
At the same time, Mukherjee also said the Indian economy was at
the cusp of a revival, as agriculture and services have continued
to grow at a decent pace. It was industrial performance that was
acting as a drag.
"While we do not have the aggregate figures for the last quarter
of 2011-12, numerous indicators pertaining to this period suggest
that the economy is now turning around. There are signs of
recovery in coal, fertiliser, cement and electricity sectors."
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