Advertisement

HindustanTimes Thu,24 Jul 2014
A moderate approach in difficult times
M Lakshminarayanan, Hindustan Times
March 16, 2012
First Published: 23:58 IST(16/3/2012)
Last Updated: 00:02 IST(17/3/2012)

The budget has been presented in particularly challenging times — and not all challenges from the economy. Fiscal deficit and high inflation continue to be the twin evils plaguing the country. Nevertheless, India continues to be a growth economy in the global scale of things, albeit at a sluggish rate.


The finance minister has spoken of tabling a white paper on black money in Parliament. Interestingly, he has introduced several provisions in the Finance Bill aimed at curbing tax evasion by making certain disclosures mandatory.
A few highlights of the budget:

Personal tax
The exemption limit for taxable income has been raised to Rs. 200,000 from the existing Rs. 180,000. There is relief at all slab levels, as explained in the report above.

The Rajiv Gandhi Equity Saving Scheme introduces marginal relief on short-term capital gains for investments in equity market of up to Rs. 50,000. This scheme would apply to individuals earning an annual income of less than Rs. 10,00,000.  Other marginal reliefs proposed include exemption on deduction of Rs. 5,000 for preventive health check-ups. Individuals earning a salary income of Rs. 5,00,000 and interest of Rs. 10,000 are not required to file tax returns. 

Though the budget promises relief to the common man with a little saving in the direct tax rate, he will end up paying more taxes than before — on services and goods!

Corporate tax
There is no change in the tax rate here. A key proposal on cross border transactions is the introduction of anti-avoidance rules that target transactions designed to avoid tax. Advance Pricing Arrangement is being introduced with the objective of reducing tax disputes on transfer pricing adjustments and providing more clarity to taxpayers.

There is a plethora of retrospective amendments aimed at nullifying various judicial precedents that provided relief to non-resident investors. On the whole, the finance minister struck a moderate balance, but retrospective amendments could have other ramifications and could have been avoided.

M Lakshminarayanan, Partner, Deloitte Haskins & Sells


comment Note: By posting your comments here you agree to the terms and conditions of www.hindustantimes.com
blog comments powered by Disqus

Advertisement
Advertisement
hys

What do you expect from Budget 2012?

The Budget 2012-13 will be presented on March 16 by the Union finance minister Pranab Mukherjee. Share with us your views and expectations from the finance minister on this year's budget.
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved