Proposed Changes in Budget 2010-2011

Budget Effects on Commodities

Fuel prices likely to go up

The fuel prices are likely to rise very soon. Finance minister Pranab Mukherjee announced in the parliament that excise duty on petrol and diesel will be increased to Rs 1/litre.

An announcement was also made to restore 5% duty on crude petroleum and 7.5% duty on petrol and diesel.

With this announcement there was uproar in the parliament and the opposition walkout in Lok Sabha

Income Tax Slabs Relaxations and Slab Restructured

Mr. Pranab Mukherjee announced the restructuring of Income tax slabs while presenting the budget for 2010-11. The new slabs include 30% tax on income over Rs 8 lacs, 20% tax on income between Rs 5 to 8 lacs and 10% tax on income between Rs1.6 to 5 lacs.

The relaxation limit under section 80C has been increased to Rs. 2 lakhs. He also announced that exemption limit in Income Tax will be enhanced to Rs. 1.6 lakhs. Also, the surcharge has been withdrawn. Current surcharge on companies has been reduced to 7.5%.

The presumptive tax limit has been raised to Rs 60 lacs.

An announcement was also made for a deduction of Rs 20000 on investment in infra bonds.

Direct Tax Code from April 1, 2011

Finance minister Pranab Mukherjee made an important announcement while presenting the budget 2010-11 that the Direct Tax Code will be implemented from April 1, 2011.

Budget 2010-11 strives for infra sector

Finance minister of India, Mr. Pranab Mukherjee made many announcements that stressed to develop the infra sector of India. Funding of various schemes plus sectors seems to lay the imprint of an unmatched development.

Mukherjee announced a sum of Rs. 10,000 crores towards Indira Awaas Yojna and Rs. 48000 crores towards the Bharat Nirman Yojna. 25% of planned allocation will be directed towards rural infrastructure.

An interest subvention for housing loans up to Rs. 1 lac has also been announced. Also, the fund allocation towards NREGA scheme has been enhanced to Rs. 41000 crores.

Another significant announcement stated the allocation of Rs. 5130 crores for the power sector.

Rs 3000 Crores for agricultural impetus

Union Finance minister Mr. Pranab Mukherjee announced that Rs 3000 Crs will be spent for impetus of agriculture sector in India. In addition to this, the farm loan payments have been extended for 6 months. Pranab Mukherjee also said that the subsidy on fertilizers is to be reduced. There is also an announcement of 2% subsidy on loans to farmers.

Dis-investment target of Rs. 25,000 crores

Pranab Mukherjee declared a target of Rs 25,000 crores through the disinvestment process. He said that the government aims at producing a total sum of Rs 25,000 by disinvesting the stake of government in some pre decided firms and organizations.

Handicrafts get their dues

Pranab Mukherjee in the parliament announced an interest subvention of 2% to be extended for handicrafts and SMEs. He also said that Rs 200 Crs will be spent for Tamil Nadu textile sector. Also, skill development programmes for textile sector have been announced.

Rs. 2400 crores allotted for MSMEs

Finance minister announced a fund of Rs. 2400 crores towards Micro Small and Medium Enterprises (MSMEs) in India. He stated that special attention was needed for MSMEs and this is a sincere effort on part of the government. The allocation of fund is made with the one and only view of boosting the MSME sector.