LS passes Finance Bill 2005

This brings into effect the tax proposals contained in Budget by voice vote.

Bowing to all-round criticism, Finance Minister P Chidambaram on Monday exempted all savings accounts from the 0.1 per cent banking cash transaction tax but raised the limit of cash withdrawals by individuals and companies to Rs 25,000 and Rs 1,00,000 respectively in current and other accounts and the Income Tax exemption limit for women and senior citizens above 65 years.

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Replying to the discussion on the Finance Bill, 2005 in the Lok Sabha, he also removed advertising expenditure from the purview of other controversial Fringe Benefit Tax and reduced the base value on all expenditures, barring four, from 50 to 20 per cent.

Making modifications in some indirect tax proposals, he extended the seven per cent customs duty on laptops to all other computer imports like monitor, computer processing unit and mouse, and exempted four per cent countervailing duty on components for mobile phone manufacturing in India.

He reduced the specific excise duty on molasses from Rs 1,000 per tonne to Rs 750 and the countervailing duty on import of nylon nets for tuna fishing from 15 per cent to five per cent.

Maintaining that women and senior citizens were the constituencies of the UPA coalition, he raised the income tax exemption limit for women to Rs 1,35,000 from his budget proposal of Rs 1,25,000.

Similarly, for senior citizens, he raised it from Rs 1,50,000 to Rs 1,85,000 taking most of the elders from out of the tax net.

Correspondingly the Income Tax rates have been revised for women and senior citizens, Chidambaran said adding women earning between Rs 1,35,000 and Rs 1,50,000 will attract 10 per cent tax and between Rs 1,50,000 and Rs 2,50,000 will attract 20 per cent. Beyond Rs 2,50,000, it would be 30 per cent.

For senior citizens, Income between Rs 1,85,000 and Rs 2,50,000 will attract 20 per cent and beyond Rs 2,50,000, it would be 30 per cent.