Indian Union Budget 2011-12 : Income tax exemption limit hiked to Rs 1.8 lakh

by khalid on 28/02/2011 · 1 comment

Finance Minister Pranab Mukherjee has brought cheer to the individual taxpayer by raising the basic income tax exemption limit from Rs 1.6 Lakh to Rs 1.8 Lakh. The move will see the individual save at least Rs2,000 in taxes in financial year 20011-12. This was his third Budget. Mukherjee also also added some more points in income tax category as he proposed to reduce eligibility age of senior citizens from 65 years to 60 years and enhancing the exemption limit for them from Rs 2.40 lakh to Rs 2.50 lakh. He also created a new category of ‘Very Senior Citizens’ of 80 years and above who will be eligible for a higher exemption limit of Rs 5 lakh. The qualifying age limit for senior citizens is also being lowered to 60 years from 65 years.

Now the general tax payers will have to pay 10 per cent tax on income between Rs 1.8 lakh and Rs 5 lakh; 20 per cent between Rs 5 lakh and Rs 8 lakh; and 30 per cent on income above Rs 8 lakh.

Highlights of the Budget :-

Fiscal Deficit :

1. Fiscal deficit seen at 5.1 percent of GDP in 2010-11

2. Fiscal deficit seen at 4.6 percent of GDP in 2011-12

3. Fiscal deficit seen at 3.5 percent of GDP in 2013-14

Spending :

1. Total expenditure in 2011-12 seen at 12.58 trillion rupees

2. Plan expenditure seen at Rs 4.41 trillion in 2011-12, up 18.3 percent

Revenue :

1. Gross tax receipts seen at Rs 9.32 trillion in 2011-12

2. Corporate tax receipts seen at Rs 3.6 trillion in 2011-12

3. Tax-to-GDP ratio seen at 10.4 percent in 2011-12; seen at 10.8 percent in 2012-13

4. Customs revenue seen at Rs 1.52 trillion in 2011-12

5. Factory gate duties seen at Rs 1.64 trillion in 2011-12

6. Non-tax revenue seen at Rs 1.25 trillion in 2011-12

7. Service tax receipts seen at Rs 82,000 crore in 2011-12

8. Telecom fees, auction of broadband spectrum to raise Es 296.5 billion in 2011-12

Subsidies :

1. Subsidy bill in 2011-12 seen at Rs 1.44 trillion

2. Food subsidy bill in 2011-12 seen at Rs 605.7 billion

3. Revised food subsidy bill for 2010-11 at Rs 606 billion

4. Fertiliser subsidy bill in 2011-12 seen at Rs 500 billion

5. Revised fertiliser subsidy bill for 2010-11 at Rs 550 billion

6. Petroleum subsidy bill in 2011-12 seen at Rs 236.4 billion

7. Revised petroleum subsidy bill in 2010-11 at Rs 384 billion

8. State-run oil retailers to be provided with Rs 200 billion cash subsidy in 2011-12

Growth, Inflation Expectations :

1. Inflation seen at 5 percent in 2011-12

2. Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent

Taxes :

1. Standard rate of excise duty held at 10 percent

2. Service tax rate held at 10 percent

3. Scope of service tax to be widened

4. Minimum alternate tax raised to 18.5 percent from 18 percent

5. Iron ore export duty raised to 20 percent

6. Personal income tax exemption limit raised to Rs 180,000

7. Surcharge on domestic companies raised to 5 percent

Divestment :

1. Disinvestment in 2011-12 seen at Rs 400 billion

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