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Union Budget 2010
Union Budget 2010 Government has kept a conservative target of Rs. 40,000 Cr for disinvestment. GST has been pushed for another one year. If government was serious about it then it could rolled out the same in congress ruled states. But pushing for one year was more comfortable then exposing their preparedness towards the next next regime. No one surprised with this. Banking License has been opened for corporate financial institutions. We will have to see how it works out. We have seen in past frauds like Satyam happened in convenience with Banks. But since now Banks will also be of their own then will have to see security measures by RBI. I am afraid if frauds like Satyam will ever come into forefront if Banks has been manipulated by corporates as they conveniently do their account books. Probably first time we have seen the government has worked openly in favor of middle class and upper middle class clearly by making flat 10% income tax slab for the income group Rs.5-8 lakh. This income group can be classified as a family staying in a city having flat and a car also. Other middle class or lower middle class do not fall in this group or they don't show their income on returns. They may start showing more income being flat tax rate you will see more people joining this class. The rate of surcharge where income exceeds Rs. 10,000,000 is reduced from 10% to 7.5%. Industry was hoping for 5% at least. Partial stimulus has been withdrawn by bringing excise to 10% from 8%. It also gives hint that GST slab may be 10%. Petrol and Diesel price hike is announced in budget at one hand and on another hand government has raised its Customs duty to 7.5% from 2.5%. How this will benefit to ailing oil companies I am not sure if government is really serious about implementing Kirit Parekh report. One day government shows interest on freeing oil rates and leaving to it market forces to decide the rates and another day they simply work traditionally. This hike will neither work in favor of consumers nor in favor of oil companies. I dont think government will ever leave their control on oil companies. This budget proposes service tax on under construction properties. Which is going to add more fuel in the already burning property market. I am not sure in the absence of GST how builder will set off this service tax. There is no clear road map of excel rating growth for ailing agriculture industry. New section 80CCF providing for deduction of Rs. 20,000 in respect of investment made in long term infrastructure bonds. Exemption on infrastructure Bond purchase for Rs.20000 is really going to make mega infrastructure project on fast track. I am sure government is going to get huge money and real boost for their planned infrastructure projects. But we will have to see if this is going to be profitable for investors. Proposed Service tax on air line tickets will make Air tickets costlier. This budget gives hint that government may open its doors for FDI in retail sector. It may give entry to multi brand players like Wall Mart who waited long to enter into Indian market. Construction of national highway @ 20 km per day is welcome step. But will they be able able to do so. If not then is concerned Mr. Minister will be held accountable. Fiscal deficit is 5.5% of GDP is real worry. This is forth highest fiscal deficit in the world. We are behind USA,France and UK. But we are nowhere near their economy size. Health insurance for NREGA workers is welcome step. Will have to see how it happens on gound. No expenditure would be disallowed if the TDS thereon is deducted during the previous year and deposited before the due date of filing of Return Of Income. This will take effect from A.Y. 2010-2011 onwards. Rate of interest for delay in deposit of TDS has gone up from 1% to 1.5% p.m. TDS certificates will be required to be issued even after 1st April, 2010 Limit of turnover/gross receipt for the purpose of Tax Audit of business and profession enhanced to Rs. 60 lacs & Rs. 15 lacs respectively. Maximum penalty for not carrying out tax audit will go up from Rs. 1 lac to 1.5 lacs Minimum Alternative Tax: The rate has been increased from 15% to 18%. Following the increase in the rate and reduction in the surcharge, the effective tax rate becomes 19.931%. Capital Gains Tax: No changes proposed in the rates. by EXIMON.com Click here to Submit your Comments/Views on above articles
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