Hon’ble Finance Minister Mr. Chidambaram presented his seventh full budget - two when the United Front government was in power and the remaining five under the United Progressive Alliance government.
Here are the major highlights
- Personal income tax exemption hiked to Rs 1.5 lakh
- Senior citizens threshold tax limit increased from Rs 1,95,000 to Rs 2,25,000
- Tax exemption for women increased to Rs 1.8 lakh
- New tax slabs:
10 per cent for 1,50,000 to 3,00,000,
20 per cent for 3,00,000 to 5,00,000
30 per cent above 5,00,000
- Short-term capital gains increases to 15 per cent.
- Commodities Transaction Tax to be introduced on the lines of Securities Tran.Tax.
- Banking cash transaction tax withdrawn from April one, 2009.
- No change in corporate income tax.
- Asset management service under mutual funds, services by stock exchanges to be
Under Service Tax net.
- Threshold for small service providers raised from Rs eight lakh to Rs 10 lakh
ü Excise on packaged softwares to be lower from 8% to 12%
ü Government to reduce general Cenvat (central value-added tax) to 14 percent on all goods.
- No excise duty on refrigerating equipments
- Anti-Aids drug exempted from excise duty
- Small cars to become cheaper
- Reduced excise duty on two, three wheelers
- Excise duty on hybrid cars cut from 24 pct to 14 pct
- Excise on small cars cut to 12 pct from 16 pct
- Rs 50 cr for tiger conservation
- Sixth Pay Commission report by March 2008
- Defence allocation up by 10% from Rs 96,000 cr to Rs 1,56,000 cr
- 22 Sainik schools get Rs 44 crore
- Rs 624 cr for Commonwealth Games
- PAN sole identification in securities market
- Debt waiver scheme and relief to small and marginal farmers
- Duty reduced on life saving drugs
- Rs 750 crore for up gradation of 300 ITIs in 25 districts.
- No change in peak customs duty
- Central sales tax cut from 3% to 2%
- Govt withdraws banking transaction tax
- Revenue implication of Indirect taxation to be 5900 cr
- Direct taxation changes to be revenue neutral
- Levy on STT only on option premiums
- Commodities transaction tax introduced like STT
- Short term capital gains to be taxed at 15%
- No change in surcharge of corporate tax
- Custom duty on steel scrapped
ü Total plan spending in 2008/09 seen at 2.4 trillion rupees ($60.3 billion). Non-plan spending seen at 5.07 trillion rupees.
ü Government to waive debts of small farmers. The total cost of the farm debt waiver scheme will be 600 billion rupees.
ü Fiscal deficit in 2008/09 seen at 2.5 percent of GDP compared to 3.1 percent of GDP in the previous year.
ü Revenue deficit seen at 1 percent of GDP in 2008/09 compared to 1.4 percent of GDP the previous year.
ü Government confident of GDP growth of 8.8 percent in 2007/08.