Highlights of Union Budget 2008-09

Personal Taxes

• Income Tax exemption raised to Rs 1,50,000
• For income up to Rs 1,50,000 tax liability will be nil,
• Between Rs 1,50,000 and Rs 3,00,000 tax liability will be 10%,
• From Rs 3 lacs to Rs 5 lacs tax liability will be 20%,
• From Rs 5 lacs upwards it will be 30%
• Women exemption threshold extended from Rs 1,45,000 to 1,80,000
• Income Tax exemption for senior citizens raised to Rs 2,25,000

Finance & Banking

• Banking transaction tax to be withdrawn from April 2009
• Commercial banks advised to have 250 rural accounts every year
• Rs 303 cr as debt support to PSUs
• Implementation of debt waiver to be completed by June 2008
• Populism in farm loan waiver, bank shares to be hit

Other Taxes

• Increase in short term capital gains tax to 15%
• 5-yr tax holiday for setting up hospitals in tier-II, tier III regions
• 5-yr tax holiday to 2,3,4-star hotels in UNESCO's heritage sites
• Securities Transaction Tax to be treated like deductible expenditure
• No FBT on crèches, employee sports facilities
• No change in corporate income tax rate, surcharge stays
• Tax to GDP ratio increased from 9.2 per cent in 2004-05 to 12.5 per cent 2007-08.

Infrastructure & Rural Development

• Rs 31280 cr allocated to Bharat Nirman Program
• Rs 12,970 cr allocated for National Highways
• Govt to create national fund for power transmission & distribution
• Rs 70,300 cr allocated for Drinking Water Mission
• NR E G scheme rolled out for all 596 rural districts
• Urban Infrastructure allocation to be 6,870 cr
• Rs 500 cr for development of North-east

• Rs 16,202 cr for schemes with 30% women representation
• Rs 11,460 cr allocated for 100% women specific schemes

Textiles

• Rs 450 crore provision for textile parks

Other Updates

• Refrigeration components to become cheaper
• Cigarettes to be taxed more
• 4 new sectors brought under service tax net
• No change in peak rate of customs duty for non agriculture imports.
• Special Countervailing Duty on power imports.
• Some sports goods raw materials exempt from duty
• Convergence products, duty cut from 10% to 5%
• No duty on set-top boxes
• Custom duties to be reduced on some power projects, steel & aluminum melting scrap & some life saving drugs.
• Govt needs one more year to eliminate revenue deficit
• Bulk Cement to attract 400 per metric tones or 14% at adveloram, whichever is higher
• Rs 50 crore for the National Tiger Fund Authority, to deploy a special tiger protection force.
• Rs 624 crore allocated for Commonwealth Games
• Revenue deficit at 1.4% of GDP
• Govt to set up Central Plan Scheme Monitoring system
• Defense spending to increase by 10 percent
• Govt to tap into resources of SCBs to set up funds
• Completion rate of Golden Quadrilateral project at 98.6%
• Rs 16,436 cr allocated as equity support to public sector enterprises
• Keeping inflation under control is top priority
• There is immense pressure on domestic prices
• International prices of Iron Ore , other metals are up
• Growth in GDP in 2007-08 has been 8.8%
• 8% GDP growth for 12 successive years
• 2007-08 has been one of the most challenging years
• Confident of maintaining 8% growth