Token relief to individual taxpayers will cost the exchequer Rs. 4,500 crore
In a “pragmatic and domestic growth-oriented” budgetary exercise aimed at shoring up investor confidence and investment, Union Finance Minister Pranab Mukherjee on Friday sought to tap indirect taxes, especially service tax, to rake in an additional Rs. 45,940 crore into his kitty.
Also read: Doctor Pranab's bitter medicine
Presenting the budget for 2012-13 in Parliament, Mr. Mukherjee provided a token relief to individual taxpayers that will cost the exchequer Rs. 4,500 crore as a cushion from high inflation during most of the current fiscal, while raising both excise duty and service tax across the board from 10 per cent to near the pre-crisis level of 12 per cent as a step towards seamless transition to the proposed Goods and Services Tax (GST) when implemented.
As a consequence, even as prices of all non-oil goods are set to go up and are feared to add to the inflationary pressure, Finance Ministry officials sought to downplay the impact saying that the burden in the near term would get subsequently absorbed over a period of time.
With services accounting for more than one half of the country's GDP (gross domestic product) but not having a fair share in the overall revenue mop-up, the Finance Minister widened the service tax net to all services, barring 17 on the negative list. In all, he has sought to raise an additional Rs. 27,280 crore through customs and Central excise levies and Rs. 18,660 crore through service tax.
As had been expected, Mr. Mukherjee left the corporate tax rate untouched, chose not to tweak the peak customs duty and provided a slew of tax concessions to key infrastructure segments such as power, airlines, road and bridges and hospitals, cold-chain facility as also “affordable” housing.
The net effect of the imposts would be that while mobile phones, branded silver jewellery, branded garments, imported LCD and LED TV panels (of over 20 inch), among others, would turn cheaper, others such as two-wheelers, cars, refrigerators, air-conditioners, washing machines, watches, imported bicycles, gold, unbranded metal jewellery, soaps, air travel and “demerit” items like cigarettes, bidis, pan masala and chewing tobacco would cost more.
As for personal I-T, Mr. Mukherjee chose to extend the relief that was proposed in the Direct Taxes Code (DTC) for the salaried class by raising the exemption limit from the current Rs. 1.8 lakh to Rs. 2 lakh. At the threshold stage, it would mean a total relief of about Rs. 2,000. Alongside, the upper limit of the 20 per cent tax slab is proposed to be raised from Rs. 8 lakh to Rs. 10 lakh while those with income above Rs. 10 lakh will continue to pay 30 per cent tax. A deduction of up to Rs 10,000 has also been allowed for tax payers for interest from saving bank accounts. Thus, those earning up to Rs. 5 lakh and getting interest from saving bank accounts up to Rs. 10,000 will not be required to file I-T returns.
To attract more retail investors into the capital market, the Finance Minister reduced the Securities Transaction Tax (STT) by 20 per cent from 0.125 per cent to 0.1 per cent and also extended an income tax deduction of 50 per cent to new retail investors with income below Rs. 10 lakh who invest up to Rs. 50,000 directly in equities.
To support the ailing civil aviation sector, Mr. Mukherjee proposed to fully exempt from basic customs duty imports of parts of aircraft and testing equipment and allowed the national carrier to go in for external commercial borrowings (ECBs) of up to $1 billion. In keeping with the inflation level, he also hiked the duty-free baggage allowance for air travellers from Rs. 25,000 to Rs. 35,000 and for children (up to 10 years) from Rs. 12,000 to Rs. 15,000.
To get past the adverse court verdict in the Vodafone tax case on sale of capital assets in India outside the country, the government sought to amend the Income Tax Act retrospectively from 1962 to bring even 50-year-old deals under the scanner.
Also, to tackle the black money menace, the budget proposed relevant amendments in the law to compulsorily report assets and revenue held abroad and allowing for reopening of assessments up to 16 years in such cases.
As per the proposals, gross tax receipts for 2012-13 are estimated at Rs. 10,77,612 crore, marking an increase of 15.6 per cent over the budget estimates (BE) and 19.5 per cent over the revised estimates (RE) for 2011-12. Total expenditure for the new fiscal is pegged at Rs. 14,90,925 crore, of which Plan expenditure is set at Rs. 5,21,025 crore and non-Plan expenditure, Rs. 9,69,900 crore.
During the current fiscal year, the net effect of lower-than-targeted tax receipts, low disinvestment proceeds coupled with higher spending, mainly on subsidies for oil, food and fertilizer, has hiked the fiscal deficit to 5.9 per cent of the GDP in RE for 2011-12.
However, explaining the circumstances in which the numbers went awry, Mr. Mukherjee noted that he had made a “determined” attempt to come back to the path of fiscal consolidation in the budget for 2012-13 by pegging the fiscal deficit at Rs. 5,13,590 crore, which works out to 5.1 per cent of the GDP.
Evidently, the fiscal deficit has to be made up through higher borrowings, and after taking into account other sources of financing, the Centre's net market borrowings through dated securities are pegged at Rs. 4,79,000 crore. With this total debt stock at the end of 2012-13, it would work out to 45.5 per cent of the GDP as compared to the 13th Finance Commission target of 50.5 per cent, while the effective revenue deficit in budget estimates 2012-13 works out to Rs 1,85,752 crore, which is 1.8 per cent of the GDP.
Keywords: Union Budget 2012-13
Budget has given Peanuts (to tax payer) by increasing IT slabs to Rs 2 lacks, but has taken Apples (from tax payer) by increasing Excise & ST.
Most sad Budget is giving tax payers money (thouands of crores) to Banks and Airlines. Banks / Airlines in turn service rich people and make losses. When will the common man protest against this misuse of his money?
Tax exemption given to employees and common man is very little and disppointing. Marginal increase in the income tax limit will not give any relief to common man's burden. in the last three budget 1 percent relaxation in the housing loan interest were welcome move, but budget 2012 keeping silence on that.
When Congress led UPA is mired neck deep in corruption and perceived as a weak government, task of FM was to take on the issue of black money head on to instil the fear of God among hoarder of black money and the corrupt by devoting at least 5 minutes of his speech to outline an action oriented program to unearth domestic black money first and take control of that first. Any honest man would have done this.
Despite all the negatives seen on TV Channels and written by various commentators, I believe that Pranabda and the Government deserves praise. Firstly, with excellent deft handling and ably assisted by Trivedi, Trinamool has been sidelined. Their reaction today to the Budget was muted because they have been read the riot act! Therefore, not one serious objection from any Political Party means that from being a Government facing a midterm poll, People have returned to a serious debate on the merits of the budget. Regarding the Budget itself, the most crucial issue i.e reduction to subsidies, the FM has been brilliant. He has set a target and said that subsidies will be targeted and not across the board. He has all the means to correct amounts of subsidy at any time, because the budget approval by Parliament will give him that right. Finally, a drop in crude prices is on the cards with an election in the US soon.Hence, Pranabda will be seen as a hero in a year! Bravo, Dr.Singh.
Landless agriculture labour & industrial labour finds no mention in the budget.Utilization of total human resources leading to their self confidanceis missing. Agro based industry setting up in the country & making use of agricultural product judiciously is not encouraged.
Environment protection specifically installation of sewage treatment plants, solid waste plants, public toilets,& monitoring of air pollution is not encouraged.
A budget most expected by many but disappointed the entire nation by the
F.M. DO we need such a finance minister who does not understand the
stark realities of the present inflation. His budgetary announcements
only increase the miseries of the millions. Definitely each and every
act of the congressmen helps to drive the nail in their own coffin.A day
will soon come when people will wild on hearing the name of
congress.Year 2014 will be year when congress will find their place
under the earth.
Section 80 C is always the same irrespective of Inflation, Conveyance allowance is Rs 800 all life long. No Tax relief or Savings encouraged by Govt for Middle class or lower MC.. The Infrastructure bond scheme is waste of time.. No salary increments in private firms.. This Govt sucks !!!.. This is what will happen if people without Civic Sense and without knowledge on Common Man Issues puts budget & run government..
When the ordinary person IT limit has been increaed from 1.8 lakhs to 2 lakhs the limit for Senior citizen has not been increased. At leaset it should go up to 3 lakhs Moreover the government pensioners with an income of 5 lakhs can be exempted from filing returns
It is presumed that the exemption limit for senior citizens would also be correspondingly higher at Rs. 2,50,000. It will be great if senior citizens whose income comprises of only interest income from banks and similar institutions and pension etc. are spared from submitting Form 15-H which is very irritating and annoying.
Life is confined in numbers. The harder I try to save something, the
more is the hike in prices. Sometimes I wonder, "Why the prices increase
always?" The same Govt. swares to increase the saving rate for
investment; the same Govt. makes big subsidised policies; the same Govt.
cries for fiscal deficit; the same Govt. shouts of being pressed by
subsidy burden. But, the pity is that, the same Govt. do not come up
with any solution. Cleary, this is a policy-paralysis.
I think the idea of gold , diamond , platinum....etc going up is actually a welcome move. Atleast then people will not flock to buy these items. Also not sure why would the already cheap item like Iodised salt[read in TOI] go down further? And this is one commodity once bought stays for sooooooooooooo long. I don't even remember when was the last time i bought a pack of salt. hmm.
What stops the government from increasing the savings limit from the
present Rs. 100,000 to say, 300,000? It'll help the employees save some money for the future, pay less towards tax and will also give the government oodles of funds for its schemes. Again, instead of only depending on the hapless salaried class to run its show, government should try to bring the unorganized sector in to the tax net and should keep a strong vigil over their transactions too. Any acquisition should be accountable, not just by the salaried class; but, even otherwise and the source should be disclosed. For examples, take our politicians. What were they before 10, 20 years and what are they now? Where from the money flown in for their affluence? Leaving the tax evaders scot free, government only burdens the poor middle class to make their lives even more miserable. Whatever the relief the government claims to have given the salaried class is mere peanuts and only cosmetic.
Announced the tax limit for individual income is not satisfactory as
against the recomonded limit upto 3 laks. It may marginally be raised
atleast 2.50 lakh.
The budget is unexpected from ordinary person's point of view. It appears meaningful for only 5-10% of government employees and affluent class of people. Ordinary man will severely face the brunt of very expensive necessary commodities required for everyday living. They are charging more and more taxes.
These taxes will go to the national treasure allocated for different scheme across the nation but only 10-15% will be available for the implementation of the scheme. The rest will go the corruption. In a way, the increased service tax is channeled to the ministers via corruption. Poor is still poor. I do not see any improvement for a person whose income is 1k-10k per month.
Contrary to this, he will have to face expensive food, commutation, transport, actually everything. This budget is good for the already rich part of India's population. Unfortunately, ~92% India's population still cannot be classified upper middle class. Per capita income in most states is ~2k/month.
TOTALLY PANDITWADI BUDGET : Rail budget and general budget have ignored native people totally and we have to say sadly that this budget is totally Panditwdi in approach and practice. The development of Native people is neglected. There is no provision for free education to Native people till highest level. Panditwadi Congress is afraid that once educated , the Native people will grab power and drive out Brahminwadi, Manuwadi, Panditwadi forces . We term this Budget as anti Native people and infavor of Videshi Brahmins.
The Budget is disappointing. No announcement to give full employment to unemployed youths (viz. Right to Employment) No proper Plan for utilisation of 100% Human Resources available in the country.
marginal rise in income tax exemption limit of Rs. 20,000, biggest joke. is it not?
Kindly inform me whether 80c section how much amount will be used to avail income tax exemption. In previous year 1,00,000/- and excess Rs.20,000/- for infra bonds. As for as this year whether any announcement is there.
No relief for salaried class .By ,maintaining 10% slab at the same level lower middle class salaried class is not at all benefited while those at higher brackets are benefitted.No tax on interest on fixed deposits upto Rs.20000 should levied
Tax exemption for govt employees is something much expected that too for for Gr.C Staff and nothing materealaised for after sanctioning two D.A in the year this increase in 20,000/ is getting equated and so once again the Gr C employees are put in savings vessals and so liable for tax payment fully i think that too comparing with vast pay parity with Gr.B and higher echolon
there is still disappointment from senior citizens regarding raising of tax ecxception upto 5 lakhs
The budget is the most disappinting one. simply a mix of the figures for which a child is enough but prepared by a panel of so called economic experts. Inflation has not been considered for raising the exemption limit to all including females,Senior Citizens. Due to heavy expdr on health, transportation,food,residence etc the limit of exemption should be raised to 3 lakhs for ordinary people, 4 lakhs for females and 5 lakhs for Sr Citizens under I.T.Rules.as recommended by the Parliamentary committee on Finance submitted to Parliament. The subsidy on chemical fertilizers and pesticides should be done away with but granted for using bio/organic fertilizers and bio pesticide so the heavy expdr now paid will be avoided for improvement of economics of India and increase of service tax can also be cut. To minimise expdr on energy enough subsidy for use of solar energy should be encouraged and incentives be given for battery operated vehicles so that heavy expdr incurred on import of fuel.
Corruption is rising so are the prices. Those who saved bit-by-bit during whole of their life for old age will find that medicines, fruits, gold, silver, rent, vegetables, travel expenses and price of daily necessities have gone up. One thing is served by 2G scam-rich and famous do bigger scams so everybody is entitled to his/her scams like under-value property and save tax, take direct electric connection from pole, put bigger water connection underneath, have parallel cash management to avoid taxes of earnings and charge personal expenses to business and avoid tax. Why we read 2G that way? Nothing has come-out from 2G yet and I have belief that cover-up is successfully done. All law enforcement agencies are working to help corrupt and they are greasing their palm. This Constitution has failed and we need to think about alternatives. Mahatma Anna Hazare and Baba Ramdev's civil movement will have to be focussed now about 'Capital Punishment' to corrupt and change of Constitution.
TheUnion Budget is aiming at mobilising more money from honest tax payers so that Corrupt Politicians and Businessmen can enjoy it. Govt has once again proved the good old "Ant and Grasshopper" story.They didn't increase the tax exemption so much, otherwise the govt will be troubled, because the salaried person paid the correct tax, rest other r.....
The faces of the three persons in the photograph shows hat they are not satisfied by the budget themselves and it has been thrust on them by a foreign hand.
Will anybody tell me whether the 2.5 lakhs exemption limit which exits for senior citizens continues or it is pulled down to 2 lakhs?
Surprizingly no paper or analyst in TV consider discussing this.
The Brilliant Brains behind the Budget have, as usual, put the Middle
class and Salaried Class under the Hammer. We will pay for the
Country, will go down from middle class to lower class with spiralling
prices, will strike and lose wages for increase in Salary, get a
marginal rise after a long struggle, only for the next Budget to take
it away.
A few hundreds of us - Salaried Employees - have decided to vote
against the UPA in all elections to come.
Mr. Pranab Mukherjee has ordered the Coffin for the Congress / UPA.
my friend rightly told this budget as 'no budget'inflation control measures for common man not given.of course why these so called think tanks and economic experts should worry about day to day price.because they do not buy anything, every thing is free for them. they do not go to the shop or market place to buy essentials.our early kings and maharaja's were far better people serving people.God only should save us from these butchers.
This Budget committed the cheating on the common people. one hand giving relief to the public on the other hand raising all various taxes making burden on the public living life costly.
The Budget is on the expected line for the salaried. If the public analyse the mood of FM just before the budget,Cong was contemplating to increase the threshold tax Lt to 2.50 lacs!. It is to hoodwink the public as the UP election was in progress.Now in the Budget 2013 public will expect hope due to general Election 2014.With the kind of politicians in our country, no solution can bereally found for black money. The day is not for off that all earning persons will have unaccounted funds at an average 5 lacs and they will also suggest no probe for black is needed!
Since the revenue deficit is about 1.85 L Cr, we can see the
corresponding devaluation of rupee against foreign currencies and hence
inflation to that effect
third class Budget
DISAPPOINTING is the only word for the budget
Common man become over loaded from Taxes.Income should also be hike for them too.
There is nothing for common man in this budget. Congress has hit the final nail in it's coffin.
No IT limit is Rs.5 lakhs for very senior citizens ie 80 and above. This
could be extended to all senior citizens ie 60 and above as this is the
age for them to spend their time visiting places and going on
pilgrimage.
As per my own opinion this budget is drastic looking to the facts prevailing in our country as we are already having lot of problems and they are enjoying our hard earned money in ‘Ghaplas’.
Income exemption limit increased till 2 Lacs is is good, but other area are missing, there is no provisions for unemployment and and welfare for human resources/assets in country, Customs Duty and Excise Duty has been increased in jewelery items, that is not good, Government should identify new areas of tax collection and give good packages to export business, where India can earn or collect good Foreign Exchange.
Dirty budget for UPA.UPA is busy for his chair and fight with TMC&DMK.Govt has lost his credibitlity in front of Aam Admi.Fail to keep promises.Law should be passed in the parliament regarding upper age limit of politicians.Max-70years.young should partcipate and given chance to serve the Nation.
No Relief , only Burden ,that we get from this Budget.
This budget is suggesting us to live simple life.....if you go for
luxury you need to pay much..... Inclusive growth? Everything is in
bits n pieces. I don't see any reform. The target of fiscal deficit is
Mungerilal ke Sapne. Pranabda said, the budget is for Stability. I
guess he meant 'Political Stability' n not 'Aam Admi's stability'. I
think pranavda start announcing schemes on Sonia's name soon.
"Compulsions of managing coalitions" says the PM. And that is going to
be the mantra for every non-deliverable next 2 yrs. See the Soniya's
interview to media after lost in up "inflation is one of the reason
for defeat" Soniya is pledge because the scheme of investment name of
"RAJEEV GANDHI"
Give tax benefit of 4000 Crores and take away 45000 Cr through sales tax. What is the point. Why we Indian pay so much taxes when we do not get proper infrastruture or facilities? All this money is being siphoned by politicians, so basically we are paying taxes to these politicians and not government
when the country is under the threat of global slow down there must be some solid tax reforms like to increase the base of tax and to reduce the tax rate. This inclusion and reduction may some how will curb the problem of black money which remained as the priorty existing problem besides corruption and malnutrition
Under the budget proposals, individual income up to Rs. 2 lakh will be
free from income tax as against Rs. 1.80 lakh currently. It is only
marginal. Increase in exemption limit under 80 cc was expected. So
for the salaried class the budget is very disappointing. No relief
for senior citizens too announced.
People are already burdened by hike in rail, bus, milk and other
essential commodities hike. The hike in the service tax from 10% to
12% adds insult to the injury.
Run of the mill budget. Nothing we have not seen the last 60 years. There is no policy direction, given the fast changing world economy.
Am amazed that in a country where the government does almost nothing for the people, they want to take 30% of our income & want sales tax on good. This doesn't even include the inflation tax that every Indian has to pay.
To make matters worse they are expecting a 5% budget deficit, which will probably end up at 7.5%. That is simply a deferred tax also.
Am amazed that people can vote in such people.
We are expecting at least the individual income up to 3 lakh will be
free from income tax. Try to understand salarised peoples feelings.
The Budget is disappointing. No announcement to give full employment to unemployed youths (viz. Right to Employment) No proper Plan for utilisation of 100% Human Resources available in the country. No special schemes to Senior Citizens.
Please Email the Editor