Aiming at sustained 10 per cent growth, Finance Minister P Chidambaram began his 2006 Budget speech with a series of sops to boost agriculture and social sectors. Experts however said that it is a "moderate Budget"
In his tax proposals he 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.
The other tax proposals announced by the finance minister are as follows:
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.
Twenty-five per cent across the board increase in securities transaction tax.
Minimum alternative tax on corporates increased from 7.5 per cent to ten per cent.
Fringe Benefit Tax modified. The limits are raised, but FBT will remain as it is justified for ensuring horizontal equity.
More transactions to come under PAN.
Constituency allowances of MLAs to be treated as constituency allowances of MPs for income tax purposes.
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.
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.
