Budget 2007 One line highlights

Direct tax proposals

• Income Tax Exemption limit increased by Rs. 10,000/- for individuals across the board
• Individuals (Men) Limit Rs. 1,10,000/-
• Individuals (Ladies) Limit Rs. 1,45,000/-
• Senior Citizens Limit Rs. 1,95,000/-
• Section 80 D limit raised to Rs. 20,000/- for Senior Citizens and Rs. 15,000/- for others.
• Dividend distribution tax on Companies raised to 15 per cent.
• Dividend Distributon Tax on Money Market Mutual Funds raised to 25%
• ESOPs to be brought under FBT.
• Expenditure on samples and free distribution items to be exempted from fringe benefit tax.
• Additional revenue from direct taxes to yield Rs 3000 crore and indirect taxes revenue neutral.
• Tax exemption on aviation turbine fuel sold to turbo prop aircraft extended to all small aircraft less than 40,000 kg.
• Withdrawals by central and state governments exempted from Banking Cash Transaction Tax. The limit for individuals and HUF raised from Rs 25,000 to Rs 50,000.
• 1% Additional Secondary Education Cess introduced across the board
• Corporate Tax Rates Unchanged
• No surcharge for SMEs (firms and Companies with a taxable income of Rs 1 crore or less).
• Tax free bonds to be issued by state-owned urban local bodies.
• Five year tax holiday for two, three, four star hotels and convention centres with a seating capacity of 3,000 in NCT of Delhi, Gurgaon, Ghaziabad, Faridabad and Gautam
• Minimum Alternate Tax being extended to I-T companies.
• Benefits of investment in venture capital funds confined to IT, bio-technology, nano-technology, seed research, dairy among some others.

Service Tax Proposals

• No change in service Tax Rates
• Exemption limit for small service providers from Rs 4 lakh to Rs 8 lakh. Two lakh people to benefit out of service tax exemption. Govt to lose Rs 800 crore as a result.
• Service tax on Residents Welfare Associations whose members contribute more than Rs 3,000.
• New Services under Service Tax Net
• Services outsourced for mining of mineral, oil or gas;
  • Renting of immovable property for use in commerce or business; however, residential properties, vacant land used for agriculture and similar purposes, land for sports, entertainment and parking purposes, and immovable property for educational or religious purposes will be excluded;
  • Development and supply of content for use in telecom and advertising purposes;
  • Asset management services provided by individuals; and
  • Design services.

 

Indirect Tax Proposals

• Peak Rate For Non Agricultural Products From 12.5% to 10%
• Second and defective steel from 20% to 10%
• No Duty on Coking Coal
• Customs duty on Polyster Fibre and Yarns down to 7.5%
• Duty on Cut and Polished diamonds from 5 to 3%
• Dredgers to be exempt from import duty
• Duty on Drip Irrigation, Agricultural Sprinklers and Food processing machinery from 7.5% to 5%
• General rate on medical equipment to 7.5%
• Duty on Sunflower Oil down 15 percentage points
• Duty on pet foods down from 30 to 20%
• Excise No change in Excise Rates
• Ad-valorem component on petrol and diesel down from 8% to 6%
• Excise & Service Tax:Relief for deserving cases in job creating sectors
• SSIs exemption from Rs 1 crore to Rs 1.5 crore