Income Tax

1. Income tax slabs for individual tax payers to be as follows
   Income upto Rs 1.6 lakh:- Nil
   Income above Rs 1.6 lakh and upto Rs 5 lakh:- 10 per cent
   Income above Rs 5 lakh and upto Rs 8 lakh:- 20 per cent
   Income above Rs 8 lakh:- 30 per cent
2. Deduction of an additional amount of Rs 20,000 allowed, over and above the existing limit of Rs 1 lakh on tax saving, for investment in long-term infrastructure bonds as notified by the Central Government.
3. Besides contribution to health insurance schemes which is currently allowed as a deduction under the Income-Tax Act, contributions to the Central Government Health Scheme also allowed as a deduction under the same provision.
4. Current surcharge of 10 per cent on domestic companies reduces to 7.5 per cent
5. Rate of Minimum Alternate Tax (MAT) increased from the current rate of 15 per cent to 18 per cent of book profits.
6. To further encourage R&D across all sectors of the economy, weighted deduction on expenditure incurred on in-house R&D enhanced from 150 per cent to 200 per cent made to National Laboratories, research association, colleges, universities and other institutions, for scientific research enhanced from 125 per cent to 175 per cent.
7. Payment made to an approved association engaged in research in social sciences or statistical research to be allowed as a weighted deduction of 125 per cent. The income of such approved research association shall be exempt from tax.
8. Benefit of investment linked deduction under the Act extended to new hotels of two-star category and above anywhere in India to boost investment in tourism sector.
9. Allow pending projects to be completed within a period of five years instead of four years for claiming a deduction of their profits, as a one time interim relief to the hosing and real estate sector. Norms fro built-up area of shops and other commercial establishment in housing projects to be relaxed to enable basic facilities for their residents.
10. Limits for turnover which accounts need to be audited enhanced to Rs 60 lakh for businesses and to Rs 15 lakh for professionals.
11. Limit of turnover over for the purpose of presumptive taxation of small business enhanced to Rs 60 lakh.
12. If tax has been deducted on payment by way of any expenses and is paid before the due date of filing the deduction. Interest charged on tax deducted but not deposited by the specified date to be increased from 12 per cent to 18 percent per annum.
13. To facilitate the conversion of small companies into Limited Liability Partnerships, transfer of assets as a result of such conversion not to be subject to capital gain tax.
14. “The advancement of any other object of general public utility” to be considered as “charitable purpose” even if it involves carrying on of any activity in the nature of trade, commerce or business provided that the receipts from such activities do not exceed Rs 10 lakh in the year.
15. Proposals on direct taxes estimate to result in a revenue loss of Rs. 26,000 crore for the year.

1. Rate reduction in Central Excise duties to be partially rolled back and the standard rate on all non-petroleum products enhanced from 8 per cent to 10 per cent as valorem.
2. The specific rated of duty applicable to Portland cements and cement clinker also adjusted upwards proportionately. Similarly, the ad valorem component of excise duty on large cars, multi-utility vehicles and sports-utility vehicles increased by 2 percentage points to 22 per cent.
3. Restore the basic duty of 5 per cent on crude petroleum; 7.5 per cent on diesel and petrol and 10 per cent on other refined products. Central Excise duty on petrol and diesel enhanced by Re.1 per liter each.
4. Some structural changes in the excise duty on cigarette, cigars and cigarillos to be made coupled with some increase in rates. Excise duty on all non-smoking tobacco such as scented tobacco, snuff, chewing tobacco etc to be enhanced. Compounded levy scheme for chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch packing machined to be introduced.

1. Rate of tax on services retained at 10 per cent to pave the way forward for GST.
2. Certain services, hitherto untaxed, to be brought within the purview of the service tax levy. These to be notified separately.
3. Process of refund of accumulated credit to exporters of services, especially in the area of Information Technology and Business Process Outsourcing, made easy by making necessary changes in the definition of export of services and procedures.
4. Accredited news agencies which provide news feed online that meet certain criteria, exempted from service tax.
5. Proposals relating to service tax are estimated to result in a net revenue gain of Rs 3,000 crore for the year.
6. Proposals on direct taxes estimated to result in a revenue loss of Rs 26,000 crore for the year. Proposals relating to Indirect Taxed estimated to result in a net revenue gain of Rs 46,500 crore for the year. Taking into account the concessions being given in the tax proposals and measures taken to mobilize additional resources, the net revenue gain is estimated to be Rs 20,500 crore for the year.