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1/19

8/9/2019 Budget 2oo9 10

2/19

Reforms less budget sees Sensexdrop 870 points -The Economic Times

Indian markets tanked on Monday reacting sharply to theUnion Budget 2009-10 presented by Finance Minister PranabMukherjee. The key indices, which had surged in run-up to

the budget on expectations of reforms, caved in after itturned out to be a budget of continuity and inclusivegrowth.

Bombay Stock Exchanges Sensex closed at 14,043.40, down869.65 points or 5.83 per cent. The index touched an intra-

day low of 13959.44 and high of 15097.87 National Stock Exchanges Nifty ended at 4165.70, down

258.55 points or 5.84 per cent. The broader index touched alow of 4133.70 and high of 4479.80

8/9/2019 Budget 2oo9 10

3/19

8/9/2019 Budget 2oo9 10

4/19

Fiscal deficit rises to 18-yr high at

6.8 pc of GDP -The Economic Times The Centre's fiscal deficit is projected to widen toan 18-year high of 6.8 per cent of GDP in thecurrent fiscal as the government continues toprovide stimulus to the economy, necessitating

higher market borrowings at around Rs 4 lakhcrore

With states also allowed to borrow from marketseven if their fiscal deficit increases to 4 per cent oftheir GDP against the current limit of 3.5 per cent,

the combined fiscal deficit of India will easilytouch the double-digit mark

This is excluding the off-budget borrowings tofinance fertiliser and food subsidies

8/9/2019 Budget 2oo9 10

5/19

Fears of slowdow

and shift investors

preferences have

led to significantoutflow of funds by

the FIIs.

Equity price

movements were in

tandem with trends

in the international

markets.

IMPACT

8/9/2019 Budget 2oo9 10

6/19

U/SSec 80 DD of Income TaxAct limit of deduction in respect

of maintenance ,includingmed.treatment in case ofsevere disability has increased

from Rs 75,000 to Rs 1,00,000.

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7/19

PROMOTING

LITERACY Earlier- U/S 80 E DEDUCTION receivedin respect of interest on loan for higher

education only.

NOW- Scope of the loan to extend in order

to cover all fields of study pursued after

completion of schooling.

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8/19

Minimum Rs 30 lakh needed to

be called 'wealthy -The Hindu The government on Monday doubled the thresholdfor calling a person or entity wealthy, saying the

wealth tax would be imposed only on those having a

net wealth exceeding Rs 30 lakh.

Under the existing provisions, wealth tax is charged

on "every individual, Hindu undivided family and

company at the rate of 1 per cent" of the amount by

which their net wealth exceeds Rs 15 lakh.

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9/19

Commodity market hails

abolition ofC

TT - PTI,M

umbai Commodities market players on Monday hailed

the Finance Minister Pranab Mukherjee's

decision to abolish the Commodity Transaction

Tax (CTT).

This announcement will put the Indian

commodity market at par with global exchanges

with respect to cost of hedging, thereby meeting

the government's vision of making Indian

commodity derivative market competitive on an

international canvas.

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10/19

FBT abolition a welcome step

- PTI,M

umbai The most welcome change is the completeremoval of the Fringe Benefit Tax (FBT). As the

FBT provisions were felt to be too onerous and

generated a huge adm. burden on corporates.

With this change,the earlier system of taxing the

benefits in the hands of the employees is proposed

to be restored.

ESOPS may still attract perquisite tax.

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11/19

Government commits itself to GST

- PTI, New Delhi The government today expressed its commitment

to introduce a uniform indirect tax structure acrossthe country, Goods and Service Tax (GST), fromthe 2010 after consultation with states

He said in his Budget speech while announcingincrease in excise duty rates on some items likenylon, yarn, filament, and LPG.

GST is expected to replace excise duty and servicetax at central and VAT at state level.

8/9/2019 Budget 2oo9 10

12/19

FM makes life less taxing, more

saral -The Economic Times For the millions of working people stung by therising cost of living and salary freezes or cuts,the Budget comes as a palliative, but not the

cure that they hoped for. Mukherjee said he would aim at rationalising the

existing tax structure and start by releasing thenew Direct Taxes Code within the next 45 days.

The filing of tax returns is set to become simpler,particularly for the salaried, as the governmentplans to re-introduce Saral forms.

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13/19

Life saving drugs, LCD TV cheaper; Set

top-box turns costlier - PTI, New Delhi

Customs duty on life saving drugs is reduced to

five per cent from existing 10 per cent. LCD TVs

would also attract the lower five per cent customs

duty, making the product cheaper

Customs duty @ 5% is imposed on set-top boxes

used for Direct-To-Home television service

Excise duty on branded jewellery from existing two

per cent is removed but gold bars, coins and silverwould become costlier as the government has

proposed to increase customs duty

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14/19

Customs duty on gold, silver

doubled -B

usinessS

tandard The government raised the import duty on silver

(excluding jewellery) from Rs 500 per kg to Rs

1,000 per kg, explaining that these rates were

fixed in 2004 and have not been reviewed evenas the price of gold has increased several times

Similarly, the customs duty on other forms of

gold (excluding jewellery) has been raised from

Rs 250 per 10 gm to Rs 500 per 10 gm

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15/19

Extention in the Definition

of Zero Coupon Bonds

Presently, Zero Coupon Bonds can be issued

by any infrastructure capital company orinfrastructure capital fund or public sector

company.

But now even Scheduled Banks will be

empowered to issue zero coupon bonds.

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16/19

Compensation under voluntary retirementCompensation under voluntary retirement//separationseparationscheme or termination of service SEC10(10C)scheme or termination of service SEC10(10C)

U/S 10(10C) exemption provided on amount received under V.R.SU/S 10(10C) exemption provided on amount received under V.R.Supto Rs.500000.upto Rs.500000.

Sec 89 contains provisions granting relief, if on account of receipt ofSec 89 contains provisions granting relief, if on account of receipt of

salary etc. in arrears or in advance, the tax liability is increased in thesalary etc. in arrears or in advance, the tax liability is increased in theyear of receipt.year of receipt.

With effect from the F.Y 2009With effect from the F.Y 2009--10, where any relief allowed to10, where any relief allowed toassessee under Sec89 for any ass. year in respect of any amountassessee under Sec89 for any ass. year in respect of any amount

received or receivable on voluntary retirement or termination ofreceived or receivable on voluntary retirement or termination ofservice or voluntary separation, no exemption under sectionservice or voluntary separation, no exemption under section10(10C) will be allowed in relation to such amount.10(10C) will be allowed in relation to such amount.

Likewise, no relief will be granted under Sec 89, if an exemptionLikewise, no relief will be granted under Sec 89, if an exemptionhas been claimed by the assessee under section 10(10C)has been claimed by the assessee under section 10(10C)

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17/19

Introduction of DocumentIntroduction of DocumentIdentification Number (D

IN)

Identification Number (D

IN) It has been proposed to introduce a computer basedIt has been proposed to introduce a computer based

system of quoting of DIN in respect of every notice,system of quoting of DIN in respect of every notice,order, letter or any correspondenceorder, letter or any correspondence sentsentoror receivedreceived

by theIncome Tax Department so as to enableby theIncome Tax Department so as to enabletracking of documents. If any correspondence issuedtracking of documents. If any correspondence issued

by anyIncome Tax Authority does not bear a DINby anyIncome Tax Authority does not bear a DINthen such correspondence will be treated as invalidthen such correspondence will be treated as invalidand shall be deemed never to have been issued.and shall be deemed never to have been issued.

The proposed amendment will take effect from 1The proposed amendment will take effect from 1stst

October 2010.October 2010.

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18/19

Meaning of the term manufactureMeaning of the term manufacture

Defined for the first time under the ITA.Defined for the first time under the ITA.

The term manufacture will mean aThe term manufacture will mean a changechange in ain anonliving physical object or article or thingnonliving physical object or article or thing

(a) resulting in transformation of the object or article(a) resulting in transformation of the object or articleor thing into a new and distinct object or article oror thing into a new and distinct object or article orthing having athing having a different name, character and usedifferent name, character and use,,

OROR(b) bringing into existence of a new and distinct(b) bringing into existence of a new and distinctobject or article or thing with aobject or article or thing with a different chemicaldifferent chemicalcomposition or integral structure.composition or integral structure.

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19/19

EXPANSION OF SCOPE OF GIFTEXPANSION OF SCOPE OF GIFT

Presently, any sum of money exceeding in aggregate of Rs. 50,000Presently, any sum of money exceeding in aggregate of Rs. 50,000received without consideration by an individual or HUF from personsreceived without consideration by an individual or HUF from personsother than relatives, subject to specified exceptions, is income. Hence,other than relatives, subject to specified exceptions, is income. Hence,anything which is received in kind having moneys worth i.e. property isanything which is received in kind having moneys worth i.e. property isoutside the purview of the existing provisions.outside the purview of the existing provisions.

It is proposed that the value of any property received withoutIt is proposed that the value of any property received withoutconsideration or for inadequate consideration will be income. Suchconsideration or for inadequate consideration will be income. Suchproperties will include immovable property being land or building orproperties will include immovable property being land or building orboth, shares and securities, jewellery, archaeological collections,both, shares and securities, jewellery, archaeological collections,drawings, paintings, sculptures or any work of art.drawings, paintings, sculptures or any work of art.

The scope of said provisions will be extended to include receipt of anyThe scope of said provisions will be extended to include receipt of anyimmovable property or any other property without consideration or forimmovable property or any other property without consideration or forinadequate consideration where stamp duty value or fair market value ofinadequate consideration where stamp duty value or fair market value ofsuch property exceeds Rs. 50,000.such property exceeds Rs. 50,000.