The Union Budget 2012-13 speech made by the Finance Minister Pranab Mukherjee saw a number of changes being announced across the sectors of the econom
APPROACH TO THE BUDGET
For Indian economy, recovery was interrupted this year due to intensification of debt crises in Euro zone, political turmoil in Middle East, rise in crude oil price and earthquake in Japan.
GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown at 8.4 per cent in preceding two years.
APPROACH TO THE BUDGET
For Indian economy, recovery was interrupted this year due to intensification of debt crises in Euro zone, political turmoil in Middle East, rise in crude oil price and earthquake in Japan.
GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown at 8.4 per cent in preceding two years.
India however remains front runner in economic growth in any cross-country comparison.
> Monetary and fiscal policy response for better part of past 2 years aimed at taming domestic inflationary pressure.
> Growth moderated and fiscal balance deteriorated due to tight monetary policy and expanded outlays.
> Indicators suggest that economy is turning around as core sectors and manufacturing show signs of recovery.
> Monetary and fiscal policy response for better part of past 2 years aimed at taming domestic inflationary pressure.
> Growth moderated and fiscal balance deteriorated due to tight monetary policy and expanded outlays.
> Indicators suggest that economy is turning around as core sectors and manufacturing show signs of recovery.
> At this juncture, it is necessary to take hard decision to improve macroeconomic environment and strengthen domestic growth drivers.
> Twelfth Five Year Plan to be launched with the aim of "faster, sustainable and more inclusive growth". Five objectives identified to be addressed effectively in ensuing fiscal year.
> If India can build on its economic strength, it can be a source of stability for world economy and a safe destination for restless global capital.
OVERVIEW OF THE ECONOMY
> GDP growth estimated at 6.9 per cent in real terms in 2011-12. Slowdown in comparison to preceding two years is primarily due to deceleration in industrial growth.
> Headline inflation expected to moderate further in next few months and remain stable thereafter.
> Steps taken to bridge gaps in distribution, storage and marketing systems have helped in more effective management of inflation.
> Developments in India's external trade in the first half of current year have been encouraging. Diversification in export and import market achieved.
> Current account deficit at 3.6 per cent of GDP for 2011-12 and reduced net capital inflow in the 2nd and 3rd quarters put pressure on exchange rate.
> India's GDP growth in 2012-13 expected to be 7.6 per cent +/- 0.25 per cent.
Budget 2012: Income tax exemption limit raised to Rs 2 Lakh
Giving some relief to tax payers, Finance Minister Pranab Mukherjee on Friday proposed raising the income tax exemption limit for individuals to Rs 2 lakh per annum from Rs 1.80 lakh.
Unveiling the Budget proposals for 2012-13 in the Lok Sabha, he also increased the limit to Rs 10 lakh under the 20 per cent tax slab. The current limit is Rs 8 lakh.
The Budget also exempt up to Rs 10,000 of interest income from tax.
Individual will have to pay 10 per cent tax on income between Rs 2 lakh and Rs 5 lakh; 20 per cent between Rs 5 lakh and Rs 10 lakh; and 30 per cent for above Rs 10 lakh.
Mukherjee said increasing the exemption limit is a move towards implementation of the Direct Taxes Code (DTC).
The Standing Committee of Parliament that has scrutinised the DTC Bill had suggested raising the tax exemption limit to Rs 3 lakh.
The exemption limit for the senior citizens between 60 and 80 years of age will be Rs 2.50 lakh; 10 per cent will be levied on income between Rs 2.5-5 lakh, 20 per cent between Rs 5-10 lakh and 30 per cent above Rs 10 lakh.
For very Senior Citizens (80 years and above), the income tax exemption limit will be Rs 5 lakh; 20 per cent will be levied on income between Rs 5-10 lakh and 30 per cent for above Rs 10 lak
The DTC Bill seeks to replace the half-a-century-old Income Tax Act, 1961. The savings bank account deductions, Mukherjee said, will help small tax payers.
"This would help a large number of small tax payers with salary income of up to Rs 5 lakh and interest from savings bank accounts up to Rs 10,000, as they would not be required to file income tax returns," Mukherjee said.
Unveiling the Budget proposals for 2012-13 in the Lok Sabha, he also increased the limit to Rs 10 lakh under the 20 per cent tax slab. The current limit is Rs 8 lakh.
The Budget also exempt up to Rs 10,000 of interest income from tax.
Individual will have to pay 10 per cent tax on income between Rs 2 lakh and Rs 5 lakh; 20 per cent between Rs 5 lakh and Rs 10 lakh; and 30 per cent for above Rs 10 lakh.
Mukherjee said increasing the exemption limit is a move towards implementation of the Direct Taxes Code (DTC).
The Standing Committee of Parliament that has scrutinised the DTC Bill had suggested raising the tax exemption limit to Rs 3 lakh.
The exemption limit for the senior citizens between 60 and 80 years of age will be Rs 2.50 lakh; 10 per cent will be levied on income between Rs 2.5-5 lakh, 20 per cent between Rs 5-10 lakh and 30 per cent above Rs 10 lakh.
For very Senior Citizens (80 years and above), the income tax exemption limit will be Rs 5 lakh; 20 per cent will be levied on income between Rs 5-10 lakh and 30 per cent for above Rs 10 lak
The DTC Bill seeks to replace the half-a-century-old Income Tax Act, 1961. The savings bank account deductions, Mukherjee said, will help small tax payers.
"This would help a large number of small tax payers with salary income of up to Rs 5 lakh and interest from savings bank accounts up to Rs 10,000, as they would not be required to file income tax returns," Mukherjee said.
Economic Times dt.17 March 2012
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