Major Tax Proposals in Union Budget 2011

1. Personal income tax exemption limit increased from Rs.1.6 lacs to Rs.1.8 lacs
2. For senior citizens from 60 years upto 80 years exemption upto Rs.2.5 lacs
3. For senior citizens beyond 80 years exemption upto Rs.5 lacs
4. Surcharge on Corporate income tax reduced to 5% from 7.5%
5. MAT - Minimum Alternate Tax increased from 18% to 18.5% of book profits
6. Dividend Distribution Tax u/s 115o will be reduced because of reduction in surcharge to 5% from 7.5%
7. No change in Excise Duty Rates
8. No change in Service Tax Rates
9. CST to remian at 2% - no roadmap provided for reducing / scrapping of this 2%
10. Rates of customs duties retained
11. 15% tax on foreign company dividend

Union Budget 2011

This year budget promised / set road map for 4 major legislations.

1. Direct tax code - to be implemented from April 2012
2. GST - Draft bill to be prepared. Constitutional Amendments to be placed in Parliment during this budget session
3. New Companis bill to be introduced in this session of Parliment
4. Standards of Weights and Measures Act to be replaced with Legal Metrology Act

 This is positive development albeit with its own delays. All the four are landmark legislations and will significantly impact the way corporates carry on their business.