Tax proposal in Budget 2011

Posted on    28 February 2011



Direct Taxes

„ Exemption limit for the general category of individual taxpayers enhanced from

` 1,60,000 to ` 1,80,000 giving uniform tax relief of ` 2,000.

„ Exemption limit enhanced and qualifying age reduced for senior citizens.

„ Higher exemption limit for Very Senior Citizens, who are 80 years or above.

„ Current surcharge of 7.5 per cent on domestic companies proposed to be reduced

to 5 per cent.

„ Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to

18.5 per cent of book profits.

„ Tax incentives extended to attract foreign funds for financing of infrastructure.

„ Additional deduction of ` 20,000 for investment in long-term infrastructure bonds

proposed to be extended for one more year.

„ Lower rate of 15 per cent tax on dividends received by an Indian company from

its foreign subsidiary.

„ Benefit of investment linked deduction extended to businesses engaged in the

production of fertilisers.

„ Investment linked deduction to businesses developing affordable housing.

„ Weighted deduction on payments made to National Laboratories, Universities

and Institutes of Technology to be enhanced to 200 per cent.

„ System of collection of information from foreign tax jurisdictions to be


„ A net revenue loss of ` 11,500 crore estimated as a result of proposals.

Indirect Taxes

„ To stay on course for transition to GST.

„ Central Excise Duty to be maintained at standard rate of 10 per cent.

„ Reduction in number of exemptions in Central Excise rate structure.

„ Nominal Central Excise Duty of 1 per cent imposed on 130 items entering in the

tax net.

„ Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.

„ Optional levy on branded garments or made up proposed to be converted into a

mandatory levy at unified rate of 10 per cent.

„ Peak rate of Custom Duty held at its current level

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