Finance minister Pranab Mukherjee on Monday announced a string of measures, including the withdrawal of 1% excise duty on jewellery, relaxed the norms for arresting persons violating customs rules and raised the threshold for tax collection at source on cash purchases of jewellery to Rs. 5 lakh from the present Rs. 2 lakh.
Mukherjee also delayed introduction of the controversial General Anti-Avoidance Rules (GAAR) by a year to 2013-14. The proposed rules seek to empower taxmen to clamp down on deals and incomes if they believe these were structured in a particular way only to avoid paying taxes.
He, however, offered no relief to British telecom firm Vodafone on its five-year tax dispute on its 2007 deal to acquire Hutchison Whampoa's mobile assets in India.
Stock markets cheered the announcements and the BSE benchmark Sensex ended higher by 82 points or 0.48%, up at 16,912.71 points, reversing a day's losses when it had plunged by 317 points during intra-day trade."The government has decided to withdraw the levy (1% excise duty) on all precious metal jewellery, branded or unbranded, with effect from March 17, 2012," Mukherjee said while initiating the debate on the Finance Bill, 2012 in the Lok Sabha. The bill will be put to vote in Parliament's lower house on Tuesday.
The threshold limit for tax on cash purchase on bullion will be retained at Rs. 2 lakh, Mukherjee said adding that bullion will not include any coin or other article weighing 10gm or less.
Mukherjee also rolled back the proposed 1% tax deduction at source (TDS) on transfer of immovable property.
"I have received a number of representations pointing out the additional compliance burden this measure would impose.
I, therefore, propose to withdraw this provision for levy of TDS on transfer of immovable property," the finance minister said.