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Union Budget 2001-02 » Union
Budget Highlights Part II
New Delhi, Feb 28: Following are the highlights of Part-B of budget 2001-2002.
Indirect taxes
Excise
- Additional excise mop up estimated at Rs 4,677 crore in a year. Total collection up from Rs 71,252 crore to Rs 81,720 crore.
- Few items that currently attract CENVAT of 8 per cent will henceforth be charged at the normal rate of 16 per cent except Cotton yarn including sewing threat, LPG, Kerosene and diesel engines up to 10 hp, which are being left at 8 per cent.
- Major rationalisation in excise duty structure: about 80 per cent of the revenue in respect of ad valorem duties will come from the single rate of 16 per cent and about 17 per cent from the combined rate of 32 per cent.
- Food preparations based on fruits and vegetables being completely exempt from excise duty. - Special surcharge on cigarettes/biris/pan masala for funding of the national calamity contingency fund.
- Iincrease in excise duty on high speed diesel and motor spirit not proposed to be passed on to the consumeRs except for any technical corrections.
- Specified banking and financial services, authorized service stations for servicing of vehicles including two wheeleRs, port services, broadcasting services, photographic services, convention services, sound recording services, scientific and technical consulting services, telex services, telegraph services, facsimile services, on-line information and data base retrieval services, video tape production services, services auxiliary to insurance and service provided to lease circuit line holdeRs brought under tax net.
Customs Duties
- Customs tariff would be brought progressively within three yeaRs and number of rates to be reduced to the minimum with a peak rate of 20 per cent
- The surcharge of 10 per cent to lapse on 31.3.2001 peak level of customs duty consequently declines from 38.5 per cent to 35 per cent.
- Increased duty on crude edible oils to a uniform rate of 75 per cent and refined oils to 85 per cent.
- Customs duty on tea, coffee, copra, and coconut and desiccated coconut increased from the present 35 per cent to 70 per cent.
- Duty on import of second hand caRs, old multi utility vehicles, scooteRs and motor cycles enhanced.
- Reduction in duty on it and telecom. Customs duty on cinematographic cameras, projectoRs and certain other related equipment used by the film industry reduced from 25 per cent to 15 per cent.
- Accredited pressmen and cameramen now allowed to import cameras, computeRs, fax machine etc. Up to a value of one lakh rupees for their professional use without payment of customs duty once in two yeaRs. Customs duty on gold reduced from Rs 400 per 10 grams to Rs 250 per 10 grams.
- CVD on the imported consumer products to be charged on the basis of maximum retail price.
Direct taxes
- Total collection up from Rs 72,105 crore to Rs 85,275 crore. Direct taxes proposals to result in a revenue loss of Rs 5,500 crore, which would be made up with tax buoyancy and increased voluntary compliance.
- Same rates as last year. Co-operative societies, however, will hence forth pay 30 per cent tax instead of 35 per cent.
- All surcharges payable by corporates and non-corporates removed except surcharge of 2 per cent for financing national calamity contingency fund. Assesses having an income of up to Rs 60,000/= will not be subject to any surcharge.
- 100 per cent duduction for donatiions to the national trust for welfare of peRsons with autism, cerebral palsy, mental retardation and multi0ple disabilities.
- One-by-six scheme being extended to all urban areas in the country as defined by the 1991 census. Changes arising out of the 2001 census will be incorporated susequently.
- Even loss making companies to file their returns.
- Income tax deduction at source at the rate of 10 per cent on income by way of commission or brokerage exceeding Rs 2,500, except on transactios relating to shares and securities.
- Winnings from lotteries, crossword puzzles etc. Will now be taxed at 30 per cent income tax at the rate of 30 per cent will be deducted at source from the winnings of television game shows and all similar game shows.
- Limit on income interest on time deposits for tax deduction at source being lowered from Rs 10,000 to Rs 2,500.
- Salaried persons in the lower income range having income up to rupees one lakh will get an enhanced tax rebate at the rate of 30 per cent in respect of their eligible investments under section 88 of the Income Tax Act, as against 20 per cent at present.
- The profits of export oriented units, and units located in export processing zones, free trade zones and software technology parks on the permitted sales in India to be taxed.
- Profits derived by the units located in the software technology parks from the export of ''on-site'' services will be eligible for deduction like their other export income. Units located outside these zones will also get the benefit of tax exemption on such export earnings. Condition relating to transfer of ownership of companies in sections 10a and 10b of the income-tax act shall not apply in respect of companies in which public are substantially interested.
- Tax exemption available to NABARD, National Housing Bank and Small Industries Development Bank of India (SIDBI) withdrawn.
- Tax exemption in respect of interest paid on external commercial borrowings withdrawn for such borrowings made on or after the first day of June 2001.
- The maximum limit of the deduction on certain interest income
under section 80l being reduced to Rs 9,000.
The tax payable on the distribution of dividends of domestic companies and income in respect of units of mutual funds and UTI being reduced to 10 per cent. - Boost to primary capital market-long-term capital gains arising from the sale of securities and units if such gains are reinvested in primary issues of shares of public companies exempted.
- Ten-year tax holiday for the core sectors of infrastructure namely, roads, highways, waterways, water supply, irrigation, sanitation and solid waste management systems, which may be availed of during the initial twenty years. In the case of airports. Ports. inland ports, industrial parks and generation and distribution of power, which also become commercially viable only in the long run, a tax holiday of ten years is being proposed to be availed of during the initial fifteen years.
