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The 0.1% tax will be charged on withdrawals from current account and encashment of term deposits exceeding Rs 25,000 on a single day by individuals and HUFs

THE FOLLOWING updation is made on 02.05.2005 in Union Budget 2005-06

The income tax exemption limit has been raised from Rs 1,50,000 to Rs 1,85,000 for senior citizens and from Rs 1.25 lakh to Rs 1.35 lakh for women.

In the controversial tax on cash withdrawals savings account will be exempt, providing relief to the salaried middle class. The 0.1% tax will be chargable only on withdrawals from current account and encashment of term deposits crossing the Rs 25,000 mark on a single day by individuals and HUFs. Businesses - companies and firms - will have to pay the tax if withdrawals exceed Rs 1 lakh on a single day.

A 7% additional customs duty on import of computers will apply uniformly on all - whether imported in the form of CPU, monitor, mouse and key board presented as a set or otherwise.

Components for manufacture of cell phones will be exempt from 4% CVD. Customs duty on monofilament long line systems for tuna fishing has been cut from 15% to a nominal 5%. These will be exempt from CVD through exemption from excise duty.

Excise duty on isolated soya protein has been lowered from 16% to 8%. The excise duty on molasses has been lowered from Rs 1,000 per tonne to Rs 750 per tonne. The optional excise duty on nylon tyre chord fabric (above 840 deniers) has been raised from 8% to 16%.

FRINGE BENEFIT TAX (FBT)

According to P. Chidambaram's announcement in the Lok Sabha, a FBT of 30% will be levied on 20% of the fringe benefit expense. In simpler terms, FBT will work out to be 6% of the total amount.

But in end, the effective FBT turned out to be just 2% for regular companies and 0.5% for special-category companies like IT and pharmaceuticals. What's more, India Inc can avoid paying even this minuscule amount of tax if their auditors certify an expense as a genuine business expenditure.

According to industry sources, there will be 1.5 to 2% additional tax burden to companies due to items covered under FBT account for about 10-15% of total corporate profits.

Taxable	Exempted
Use of telephones, including mobile phones, the base for valuation will be 20%	Expenses on advertising
The base for valuation of FBT will be 20% for expenses on entertainment, hospitality, sales promotion and publicity, employee welfare, conveyance, tour and travel (including foreign travel) and use of hotels.	Expenses on leased lines will.
50% for expenses on festival celebrations, use of clubs, scholarships and so on.	Charitable institutions, trusts and funds.
For superannuation funds, FBT will be levied on the entire contribution made by the employer for employees.	Individuals and Hindu Undivided Families (HUFs) engaged in a business or profession.
Tax on foreign tour and travel. Infosys, for instance, spend about 4% of its revenues on foreign travel. Phone bills account for close to 1%, another expense attracting the fringe benefit tax.	Conference expenses, only the fee for participation
Repairs and maintenance of cars have also been brought under the purview of fringe benefit tax now. The only saving grace is that only 5% of maintenance costs for transport companies will now be subject to FBT.	Employee welfare expense, only the expenses incurred to fulfil any statutory obligation or to mitigate hazards or to provide first aid facility that too only in a hospital or dispensary run by the employer.
Any privilege, service or amenity provided directly or indirectly by an employer by way of reimbursement or otherwise to employees will attract FBT, which is to be paid by employers.	Guest houses for training.
Fifty per cent of expenses on club facilities.	Expenses incurred due to sales promotions
Expenses borne by companies on foreign travel of their employees will be under the purview of FBT. FBT on travel expenses has been cut to 5%.	Medical expenses. \
Any free or concessional ticket provided by the employer for private journeys of employees or their family members and any contribution to an approved superannuation fund for employees will come under the purview of FBT.	Companies that are loss making.
Expenditure on employees welfare will attract FBT, but not the expenditure incurred or payment made to fulfil any statutory obligation or mitigate occupational hazard or provide first aid facilities in hospital or dispensary run by employers.
Other expenditures that will come under FBT are conveyance, tour and travel including foreign travel, use of hotel, boarding and lodging facilities, repair, running, maintenance of motor cars and aircraft and the amount depreciation on them.
Maintenance of any accommodation like guest house except those used for training purposes, festival celebrations, use of health club and similar facilities, use of any other club facilities, gifts and scholarships will come under FBT.