Highlights of Union Budget 2005-06

Highlights of Union Budget 2005-06

Finance Minister P Chidambaram presented his fourth Budget in Parliament on Monday.

Following are some of the highlights:

The new income tax rates will be Rs 100000 NIL tax; Rs 1 to Rs 1.5 lakh 10% tax; Rs 1.5 to Rs 2.5 lakh 20%; above Rs 2.5 lakh 30%
10 per cent service charge will be applicable on income beyond Rs.10 lakh instead of present Rs.8.5 lakh.
Conveyance and canteen allowance to be outside the tax net but all other perks given by employers to employees as a collective benefit will be taxed at 30 per cent. This new tax will be called Fringe Benefit Tax and will be levied on employers.
Six exemptions including interest payments on housing loan on self-occupied and medical insurance premium will be continued.
Corporate income tax for domestic companies reduced to 30 per cent. The 10 per cent surcharge continues.
Minimum Alternate Tax will continue.
100 per cent tax deduction for companies carrying out scientific research.
Exemption of withholding tax on leasing of aircraft or aircraft engines from foreign companies extended till September 30 this year, following request from Air India and Indian Airlines.
Securities transaction tax raised from 0.15 per cent to 0.2 per cent.
Mobile and telephone to be removed as criteria for income tax return filing.
New criteria, electricity bill above Rs 50,000 per annum; tax on withdrawal of Rs 10,000 in a day to be 0.01%.
Corporate tax cut by 3% (repeat 3%): Domestic companies: 30%, 10% surcharge
Threshold level for women Rs 1.25 lakh and for senior citizens Rs 1.5 lakh.
Standard reduction on income tax removed.
Cess on petrol and diesel has been raised by 50 paise which will be exclusively earmarked for national highway development programme.
Direct tax: Tax brackets altered.
Plus surcharge of 10% will remain
16% excise on iron and steel
Zero per cent customs and excise duties on LPG for domestic use and kerosene
Vanaspati: 1% surcharge abolished.
Tax for SSI: Sealing SSI increased from Rs 3 crore to Rs 4 crore.
Tea: 1% surcharge abolished.
Imitation jewellery: Excise to be reduced to 8%. 2% tax to be levied on expensive jewellery and branded jewellery. No extra tax on unbranded jewellery.
CENVAT on polyester filament yarn, tyres and radiators to be reduced.
IT software will be expemted from CVT
0% to 60 % duty increased for cut flowers
IT software will be expemted from CVT
30% to 60 % duty increased for cut flowers
Customs duty cut! Food processing -- reduce 20% to 10% in refrigerated vans.
Pharma & biotech: Customs duty on 9 spec items reduced.
Printing presses: Customs duty cut from 20% to 10%
Customs duties cut from 20% to 10% on footwear
Customs duties cut from 20% to 5% on lead
Customs duties cut from 20% to 10% on refrigerated vans
Customs duties on textile machinery cut to 10% from 20%
Customs duty structure: Peak rate reduced to 15% from 20% on non-agri goods.
Twelfth Finance Commission's recommendations would cost the exchequer Rs 26,000 crore in 2005-06. VAT to be implemented from April 1, 2005
Total revenue receipts of the govt: Rs 35,120 crore
Non-Plan expenditure at Rs 37,847 crore.
Fiscal correction: Revenue deficit to be at 2.7% of the GDP at the end of the year
New AIIMS to be launched
National Rural Health mission to be launched
Govt to raise plan expenditure by 25.5% in FY 06
1 cr to be employed in irrigation schemes
New schools for minority areas
2000 Rajiv Gandhi fellowships for SC/ST
Plan expenditure to be by 25.5%
Rs 1000 cr for irrigation
Rs 60,000 lakh for houses to poor
Telephone for 66,220 villages
Rs 30,000 cr for Textile sector
Rs 50 crore for Agriculture research
Manufacturing competitiveness council planned
Life insurance scheme to cover 20 lakh weavers in 2 yrs
Rs 150 cr R & D corpus to be hiked
Sugar industries : Interest rate to be lowered for outstanding loan
SME development bill to be introduced
Public-pvt partnership to develop skills of ITIs
NHDP hiked to Rs 9320 cr
Indira Awaas Yogana - 15 lakh new houses to be built
Rs 1500 cr viability gap funding for core sector
7 mega cities plan outlay of Rs 5500 cr in FY 06