The annual Union Budget is the Finance Minister’s report on what the Government of India has done with the country’s money over the past year and what is expected in the coming year.
Who decides the budget?
The Finance Minister presents the final Budget, after it is worked on by the Ministry of Finance. The Budget is presented to the Lok Sabha on the last working day of February. It has then to be discussed and passed by the house before coming into effect on April 1st.
How does the Union Budget affect my life?
The Union Budget not only talks about what has happened in the past year, but also what is likely to happen in the coming year. While many of the things discussed in the Budget affect us indirectly, one space that directly impacts us is Taxation! The Tax Slabs & Norms are often tweaked or changed completely in the Budget, which means that the amount of tax you pay could increase or decrease!
Exports grown by 9.6%, imports by 17.6% in April-January 2010-11 over corresponding period last year
Indian economy expected to grow at 9% in 2011-12.
Five-fold strategy to deal with black money. Group of Ministers to suggest ways for tackling corruption
Direct Tax Code (DTC) to be effective from April 01, 2012
Rs.40,000 crore to be raised through disinvestment in 2011-12
Rs.500 crore to be provided to regional rural banks to maintain 9% CRAR Capital to Risk Weighted Asset Ratio
India Microfinance Equity Fund of Rs.100 crore to be created by SIDBI
Micro Small and Medium Enterprises MSME gets boost as Rs. 5000crore provided to SIDBI and Rs.3000 crore to NABARD
Provision under Rural housing Fund enhanced to Rs.3000 crore
Allocation under Rashtirya Krishi Vikas yojna (RKVY) increased to Rs.7860 crore
Allocation of Rs.300 crore to promote 60000 pulses villages in rainfedareas
Rs. 300 crore vegetable initiative to achieve competitive prices
Rs.300 crore to promote higher production of nutri-cereals
Rs.300 crore to promote animal based protein
Rs.300 crore Accelerated Fodder Development Programme to benefit farmers in 25000 villages
Credit flow to farmers raised from Rs.3,75,000 crore to Rs.4,75,000crore
Rs.10,000 crore for NABARD’s Short Term Rural Credit Fund for 2011-12
58000cr for india development
4113 rural homes will be developed
3000cr for expenses to government organizations.
FII limitation is $25b
Current Slabs ( ` ) Proposed Slabs ( ` ) Basic rate of tax
Upto160,000 Upto180,000 Nil
160,001to500,000 180,001to500,000 10%
500,001to800,000 500,001to800,000 20%
Above800,001 Above800,001 30%
No change in tax Structure
Upto190,000 Upto190,000 Nil
190,001to500,000 190,001to500,000 10%
500,001to800,000 500,001to 800,000 20%
Above800,000 Above800,000 30%
Age for eligibility reduced from 65 years to 60 Years Upto 240,000 Upto 250,000 Nil 240,001to500,000 250,001to500,000 10% 500,001to800,000 500,001to800,000 20% Above800,001 Above 800,001 30% For Senior Citizen (80years & above) Hike in exemption limit to ` 5 lakh will result on big gains Upto 240,000 Upto 500,000 Nil 240,001to500,000 - 10% 500,001to800,000 500,001to800,000 20% Above 800,001 Above 800,001 30%
52057cr for education.
21000cr to “purv shiksha abhiyan”
190 organizations is going to connect with national knowledge network.
Government provide connectivity to1500 organizations till march 2012.
1500cr secntioned loan for 7 th planing.
Permission of 30000cr for tax free bonds.
5400cr for free special central help.
98900cr for “PICHDA VARG”
The Direct Taxes Code is likely to be effective from 1 April 2012
The Corporate tax,Firms,Local authority, Co operative Societies rate remains unchanged
The basic rate of MAT increased to 18.5% from 18 %
The surcharge for domestic companies reduced to 5% from 7.5 %
The surcharge Non domestic companies reduced to 2 % from 2.5 %
NEW INCOME-TAX return form called “ Sugam” to be introduced for small business.
Salary earners having an income of less than ` 5 lakh is exempted for filing income tax return from this year.
Provision for tax-free infrastructure bonds extended by 1more year
Public Sector Bank Capitalisation
` 6,000 crore to be provided during 2011-12 to enable public sector banks to
maintain a minimum of Tier I CRAR of 8 per cent.
Recapitalisation of Regional Rural Banks
` 500 crore to be provided to enable Regional Rural Banks to maintain a CRAR
of at least 9 per cent as on March 31, 2012.
Micro Finance Institutions
“ India Microfinance Equity Fund” of ` 100 crore to be created with SIDBI.
Government considering putting in place appropriate regulatory framework to
protect the interest of small borrowers.
“ Women’s SHG’s Development Fund” to be created with a corpus of ` 500 crore.
Housing Sector Finance
Existing scheme of interest subvention of 1 per cent on housing loan further liberalised.
Existing housing loan limit enhanced to ` 25 lakh for dwelling units under priority sector lending.
Provision under Rural Housing Fund enhanced to ` 3,000 crore.
To enhance credit worthiness of economically weaker sections and LIG
households, a Mortgage Risk Guarantee Fund to be created under Rajiv Awas Yojana.
Removal of production and distribution bottlenecks for items like fruits and
vegetables, milk, meat, poultry and fish to be the focus of attention this year.
Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from ` 6,755 crore to ` 7,860 crore.
Plan allocations for health stepped-up by 20 per cent.
Scope of Rashtriya Swasthya Bima Yojana to be expanded to widen the coverage.