Finance Minister P Chidambaram announced the budget for fiascal 2006-07 in Parliament on Tuesday. The experts said that there were no major surprises and termed it as a moderate Budget.
Following are the Budget proposals announced by the FM
Services tax net to be increased which include ATM operations, maintenance and management, share transfers, registration, international air travel excluding economy class, sponsorship other sports events, auctioneers, ship management and travel on cruise.
25 per cent across the board increase in securities transaction tax.
Cooperative lending banks and rural development banks to be exempted from taxes under Section 80(B).
Fixed deposits in scheduled commercial banks with at least five-year maturity will get tax exemption for savings under section 80C of Income Tax Act.
The Rs.10,000 exemption limit for investment in pension funds under Section 80CCC has been removed but these investments would be brought under Sec.80C subject to a ceiling of Rs 100,000.
Donations to only religious institutions will be exempted from tax.
Minimum alternative tax on corporates increased from 7.5 per cent to ten per cent.
Constituency allowances of MLAs to be treated as constituency allowances of MPs for income tax purposes.
More transactions to come under PAN.
Banking cash transaction tax introduced last year will continue. In one bank branch in Chandni Chowk, laundering to the tune of Rs.1,500 crore (Rs 15 billion) was detected, Chidambaram said.
Fringe Benefit Tax modified. The limits are raised, but FBT will remain as it is justified for ensuring horizontal equity.
More items to be brought under annual information return reporting to check tax evasion.
Proposals under direct taxes estimated to yield Rs 4000 crores (Rs 40 billion) in 2006-07 and under indirect taxes Rs 2000 crores (Rs 20 billion).
In his tax proposals the finance minister announced that there will be no change in the rates of personal income tax. He further announced that there will be no new taxes on income.
He also announced the abolition of one by six scheme for filing of income tax returns. However, excise duty on cigarettes was increased by five per cent.
Eight per cent special additional duty on aerated soft drinks and small cars withdrawn and they will attract only 16 per cent Cenvat excise duty instead of 24 per cent earlier.
Reduction of duty on footwear priced between Rs 250 and Rs 750 from 16 per cent to eight per cent. Cess on domestically produced petroleum crude has been raised from Rs 1800 per tonne to Rs 2500 per tonne but the entire amout to be absorbed by oil producing companies.