|
|
Union Budget of India lays out details of income
and expenditure of the government of India.
Union Budget
Union Budget: A Brief Summary
The Union Budget gives the details of income and expenditure planned by
the government of India. Income are those that will be generated by
taxation and expenditure is which that the government is going to make.
Government's expenditure includes money spent on running various
government services, subsidies, interest charges etc. The Union Budget
is presented on the last working day of February by the Finance Minister
of India in the parliament. The Budget has to be passed by both the
houses of the Parliament before it can come to effect on April 1st.The
Union Budget is also known as the general budget.
The first budget of independent India was presented by R.K Shanmukham
Chetty on November 26, 1947. Morarji Desai has presented the Union
Budget for the maximum number of times (8 times).
Contents of the Union Budget
The Union Budget highlights the receipts and payments of the government
under three accounts:-
- Consolidated Fund: It is the main bank account of the
government.
- Contingency Fund: It is the amount kept in reserve to
guard against losses.
- Public Account: Accounts which have funds provided by the
entities of government.
The union budget also announces policies and it tells
about the government's economic thinking. It also determines activities
such as exports and foreign direct investment. The Union Budget has both
short and long term effect. Short term effect is due to the taxes levied
and prices determined. The announcement of Income Tax has a big impact
on the salaried people, who have fixed income. In the long run, the main
factor is inflation. If the government goes on printing notes to pay off
its debts then it will assist inflation.
Highlights of Union Budget 2008 - 2009
Recently Mr. P Chidambaram presented the union budget 2008-09. Some of
the highlights of the budget were:
- Changes in Income Tax slab. Threshold of exemption for all Income
Tax assesses raised from Rs 1, 10,000 to Rs 1, 50,000.
- Every income tax assesses to get relief of minimum of Rs 4,000.
- No change in rate of surcharge.
- New tax slabs will be: 10 per cent for Rs 150,000 to Rs 300,000,
20 per cent for Rs 300,000 to Rs 500,000 and 30 % above Rs 500,000.
- For women, the income tax limit goes up from Rs 1.45 lakh to Rs
1.80 lakh. In case of senior women citizens, it increases from Rs
1.95 lakh to Rs 2.25 lakh.
- Fresh facilities, encouragement to sports and guest houses
exempted from Fringe Benefit Tax.
- Five year tax holiday for setting up hospitals in tier II and
tier III regions for providing healthcare in rural areas from April
1, 2008.
- Five year tax holiday for promoting cultural tourism.
- Short-term capital gains increases to 15 %.
- Commodities Transaction Tax to be introduced on the lines of
Securities Transaction Tax.
- Banking cash transaction tax withdrawn from April one, 2009.
- Direct tax proposals to be revenue neutral. Indirect tax
proposals to result in loss of Rs 5,000 crore.
- Customs duty on specified life saving drugs reduced from ten per
cent to five per cent.
- Special Countervailing Duty on power imports.
- Customs duty on specified sports goods machinery down from 7.5
per cent to five per cent.
- Duty withdrawn on naphtha for production of polymers.
- Duty on crude and unrefined sulphur reduced from five to 2 per
cent to help raise domestic fertilizer production.
- Excise duty reduced from 16 % to 8% on all pharmaceutical goods
manufacture.
- Excise duty on small cars reduced to 12 % from 16 % and hybrid
cars to 14 per cent.
- Excise duty reduced from 16 to 8 % on water purification items.
- Duty on non filter cigarettes to be raised.
- Asset management service under mutual funds, services by stock
exchanges to be brought under Services Tax net.
|
|
