Wednesday, March 5, 2008

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  • Banking transaction tax to be withdrawn from April 2009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


  • 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

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