Union Budget 2008 (Round 2) - Tax Benefits for All

Continuing with the populist measures in the first phase of Union Budget 2008 (one hour ago), which promised a lot for the farmers, Women, SCs, STs and Minorities, Finance Minister P Chidambaram announced major tax reliefs across the board. The common Tax Exemption has been extended to Rs. 1.5 lakh, bringing huge relief to the salaried class people. Here are the details of budget highlights that focus on Duties and Taxes:

Duties:

Excise Duty cut from 16% to 14 %
Small Cars like Nano and Maruti 800 to be cheaper
Customs Duty on Crude cut from 5% to 2%
Ad Valorem duty on diesel, petrol removed
Cigarettes will be costlier
Anti-AIDS drugs will be cheaper
Duty on two-wheelers and three-wheelers reduced to 12% from 16%

Customs Duty on Project Imports cut by 2%

Customs duty on specified sports goods machinery down from 7.5 per cent to five per cent

Sports Goods to be cheaper

Set Top Box, Dairy Products, ACs and Washing Machines to be cheaper

Mobile Phones, Cement, Packed Software to be costlier

Shampoos, Oil, Tea, Coffeee, Coconut, Paper will be cheaper

With a 5% duty cut, life-saving drugs will be cheaper

IT Products will be cheaper

No excise duty on refrigerating equipments

Excise duty on hybrid cars cut from 24 per cent to 14 per cent

Excise on small cars cut to 12 per cent from 16 per cent

Custom duty on vitamin pre-mixes to lower from 30% to 20%

Duty withdrawn on naptha for production of polymers.25

Duty on crude and unrefined sulphur reduced from five to 2 per cent to help raise domestic fertiliser production

Duty withdrawn on naptha for production of polymers

General Cenvat on all goods to be reduced from 16 per cent to 14 per cent

Excise duty reduced from 16 per cent to eight per cent on all pharmaceutical goods

Import duty on Luxury Cars increased to 180 per cent

Excise duty reduced from 16 to 8 per cent on water purification items

Taxes:

Income Tax Exemptions limit for men raised Rs. 1.5 lakh
Income Tax Exemptions limit for women raised Rs. 1.8 lakh
Income Tax Exemptions limit for Senior Citizens raised to Rs. 2.25 lakh
No change in Corporate Tax
Four new sectors brought under service tax net
Earnings from Rs. 1.5 lakh to Rs. 3 lakh per annum- 10% income tax
Earning from Rs. 3 lakh to Rs. 5 lakh per annum - 20% income tax
Earnings above Rs. 5 lakh - 30% income tax

Tax exemptions up to Rs. 15,000 will be given on health policies to be spent on dependent parents
5-year tax breaks for UNESCO Sites, 2,3 and 4 star hotels
5-year Tax Holidays for Hospitals across the Country
Banking Cash Transaction tax to be withdrawn from April 2009
Fresh facilities, encouragement to sports and guest houses exempted from Fringe Benefit Tax.

No changes in Security Exchange rates
Short Term Capital Gain Tax to be increased from 10% to 15 %

General Sales Tax, reduced from 3% to 2%.

PAN requirement to be extended to all transactions in capital market subject to a threshold

Direct tax proposals to be revenue neutral. Indirect tax proposals to result in loss of Rs 5,000 crore.

Asset management service under mutual funds, services by stock exchanges to be brought under Service Tax net