Ms. Sujatha Raghuraman ( Understanding Budget 2012-2013)

1. CA.Sujatha Raghuraman 1

2.  Budget is a financial plan of government for a given
period.
 Used for projection of future income and expenditure
 Components of Government Budget – Revenue Receipts
and Expenditure & Capital Receipts and Expenditure.
 Revenue receipt – Revenue collected from collection of
taxes and other receipts.
 Other Receipts – Fees, Fines and penalties, Profit from
public sector enterprises, Gifts and grants.
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3.  Revenue Expenditure – Education, consumption of goods
and services, agriculture and industrial
development, scientific research, health, civil and aviation
etc.,
 Capital Receipt – Loan and borrowings from public
through Bonds, from RBI and other Financial
Institutions, Loans from IMF, World
Bank, NSC, PF, Recovery of loan from states and union
territories.
 Capital Expenditure – creation of Infrastructure
Project, Irrigation Project, land, Machine, Equipment, Oil
exploration, i.e investment in long term Physical and
Financial Assets
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4.  Population of India as on March’12 : 1.225 Billion
 Population growth rate:1.24%
 Life Expectancy – 66.08 years (Male)
- 68.30 years (Female)
 Literacy Rate 74.04%.
 Per Capita Income – USD 1,525 .
 Export Growth – 23.5 %
 Import Growth – 29.4%
 Fiscal Deficit – 5.9% of GDP
 GDP -7.6%
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5. DIRECT TAXES
Upto Rs.2 Lacs – NIL
Rs.2 Lacs – Rs.5 Lacs - 10%
Rs.5 Lacs – Rs.10 Lacs - 20%
Above 10 Lacs - 30%
Education Cess continues at 3%.
Due to reduction in tax rates, direct tax collections reduce
by Rs.4,500 crores.
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6. Indirect Taxes :
Excise Duty :
Luxury Cars -Gone up to 27% from 22%
Import Duty :
Luxury cars, Gold have gone up.
Customs Duty:
High purity gold in various forms doubled.
Service Tax:
Raised from 10.3 % to 12.36%
Collections from Indirect Taxes Rs.41,400 crores.
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7.  Costlier
 Cars, Two wheeler prices go up.
 Milk products, Ice creams , Chocolates, Biscuits go up.
 AC and First Class travel covered under Service Tax, cost
of travel goes upto 4%.
 Refrigerator, Cements
 Gold and Platinum Jewellery.
 Travel, Stay in Hotel, Mobile bills, Courier, beauty, health
care.
 AC, Washing Machine, Laptops, watches, perfumes
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8. Cheaper:
 Branded apparels.
 LCD TV
 Silver Jewellery.
 Home loans.
 Mobile Phones
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9.  FDI has no clarity in our economy till the next election.
– Aviation, Retail, Vodafone etc.,
 Indian Investors:
TDS at 1% on sale of property Above Rs.50 lacs.
TDS on cash purchase of Jewellery or bullion beyond
Rs.2lacs.
 All assets held abroad needs to be declared.
Income Tax Assessment can be re-opened upto 16 years
on the assets held abroad.
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10.  Service Tax exemption increased from Rs.15 lacs to
Rs.50 lacs.
 Alternate Minimum tax now on partner ship,and sole
proprietorship.
 Corporate tax remain at the same rate.
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11.  No requirement of paying Advance Tax if don’t have
“Income from Business / Profession”.
 Deduction on Medical Insurance premium gone up
from Rs.15,000 to Rs.20,000.
 Senior Citizen age reduced from 65 to 60 years.
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12.  Rs.50,000 investment in Equity market, those who
come within Rs.10 lacs of income get 50% tax
exemption- tax savings upto Rs.5,000.
 Rs.10,00 deduction on interest on savings bank
account.
 Rs.5,000 exemption on the preventive health checkup
under medical insurance premium u/s 80D .
 Long term capital gain exempted if invested Equity
Shares of SMEs.
 STT reduced to 0.1% from 0.125%.
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13.  Moderate Budget – Direct Taxes
 Unreasonable – Consumers
 FDI –No hopes for future
 Costlier – Businessman.
 Happy Budget – Film makers
 Transparent – Investors.
 Growth – Banks and FII.
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14. CA.Sujatha Raghuraman 14