Finance Minister P Chidambaram presented a mixed bag of proposals for the capital markets on Wednesday.
Positives:
1) PAN to be made sole identification number for all participants in securities market with an alpha-numeric prefix or suffix to distinguish a particular kind of account;
2) Idea of Self Regulating Organisations (SRO) to be taken forward for different market participants under regulations to be made by Sebi;
3) Mutual funds to be permitted to launch and operate dedicated infrastructure funds;
4) Individuals to be permitted to invest in overseas securities through Indian mutual funds;
5) Short-selling settled by delivery, and securities lending and borrowing to facilitate delivery, by institutions to be allowed;
6) Enabling mechanism to be put in place to permit Indian companies to unlock a part of their holdings in group companies for meeting their financing requirements by issue of exchangeable bonds.
Negatives
1) Rate of dividend distribution tax to be raised from 12.5 per cent to 15 per cent on dividends distributed by companies...
2) ..and to 25% on dividends paid by money market mutual funds and liquid mutual funds to all investors.
Wednesday, February 28, 2007
Highlights of Budget 2007-2008
• Deduction in respect of medical insurance under Section 80 (D) increased to Rs 15,000 and Rs 20,000 for senior citizens
• 2 lakh people to benefit out of service tax exemption. Govt to lose Rs 800 crore as a result
• Service tax on Residents Welfare Associations whose members contribute more than Rs 3,000
• Excise duty for plywood reduced from 16 per cent to 8 per cent
• Water purification devices, small and big, fully exempted from excise
• Customs duty on polyester to be reduced from 10 per cent to 7.5 per cent
• Duty on sunflower oil to be reduced by 15 per cent
• Import duty of 15 specified machinery to be reduced from 7.5 per cent to 5 per cent
• Duties on seconds and defective reduced from 20 to 10 per cent
• An autonomous Debt Management Office in government to be set up
• An Expert Committee to be set up to study the impact of climate change in India
• Rs 50 crore to be provided for the Commonwealth Youth Games in Pune.
• Rs 100 crore for recognising excellence in the field of agricultural research
• Any requirement for security of the nation to be provided
• Backward Regions Grant Fund to be raised to Rs 5800 crore
• 1,396 Indian Technical Institutes to be upgraded to achieve technical excellence
• Rs 50 crore provided to begin work on vocational education mission for which Task Force in Planning Commission is chalking out a strategy
• CST rate to be reduced
• Reverse mortgage scheme for senior citizens
• Special Purpose Tea Fund to rejuvenate tea production
• Gross budgetary support in 2007-08 raised to Rs 2,05,100 crore from 1,72,728 crore in 2006-07. Of this, budgetary support to the Central plan will go up to 1,54,939 crore against 1,72,728 crore.
• Two lakh more teachers to be employed and five lakh more classrooms to be constructed
• Minimum Alternate Tax extended to I-T companies
• Extend service tax to development of telecom advertising
• No change in STT, capital gains tax
• Customs duty on plastics reduced to 7.5%
• Cash withdrawal tax limit hiked to withdrawals over Rs 50,000
• Dividend distribution tax raised to 15% from 12.5%
• Tax benefit on R&D extended by 5 years
• Fiscal deficit target at Rs 1,50,94 cr
• 1% education cess on all taxes
• ESOPs under FBT
• Capital gains tax on art works
• 1% additional cess on all taxes to fund secondary education
• Duty cuts from 5-3% to help domestic trade
• Effective corporate tax rate at 19.2%
• No excise on instant food mixes
• Advalorem duty on petrol, diesel cut to 6%
• Corporate tax surcharge scrapped for small companies
• No change in CENVAT rates
• No change in corporate income tax
• Tax exemption for Senior Citizens upto Rs 1.9 lakh
• Differential excise duty on cement
• Rs 1.2 lakh crore for States
• Goods and services tax from April 1
• Income tax exemption for women raised to Rs 1.45 lakh
• Income tax exemption hiked by Rs 10,000
• Import duty cut on medical equipment to 7.5%
• Income-tax code to be introduced
• Duty on food processing machines cut to 5%
• Irrigation and food processing tariffs cut to 5%
• Pet food duty cut to 20%
• Lower duty on edible oils
• Customs duty on polished gems cut
• Excise duty on cigarettes up by 5%
• Ad valorem duty on petrol, diesel down
• Customs duty on man-made yarn & poly fibre cut to 7.5%
• Watch, Umbrella duties cut to 5%
• Reduction in excise duty on umbrella parts, bio-diesel and water pipes
• Peak customs duty on non-agro products cut to 10%
• No change in service tax rate
• Hike in exise on cigarettes
• Coking coal exempted from customs duty
• Duties on PTA, MEG and DMT cut to 7.5%
• Rs 350 cr for Delhi for Common wealth games
• Government to encourage banks to lend to SMEs
• Central PSUs to invest Rs 1.6 lakh cr
• Separate schools for class 9-12
• PAN mandatory for security transactions
• Handlooms covered under TUF scheme
• Allocation for National Highways programme increased to Rs 10,667 cr
• 100% subsidy to small farmers, 50% subsidy for other farmers
• Mortgage guarantee companies to be set up
• To create 1 lakh jobs for physically challenged people
• Rs 750 cr allocated for setting up ITIs
• Rs 321 cr allocated for handloom sector
• Private companies invited to submit plans for certified seeds
• Mumbai to be converted into world-class financial city
• E-Governance expenditure hiked to Rs 179 cr
• Part of forex reserves for infrastructure projects
• Defence allocation up at Rs 96,000 crore
• Overseas investment to be allowed by individuals via MFs
• Golden quadrilateral project near completion
• RRBs asked to undertake branch expansion
• Allocation for tourist infrastructure up at Rs 520 cr
• Health insurance allocation for weavers hiked to Rs 321 cr
• Coir industry modernisation provision at Rs 22.5 cr
• Credit rating must for SMEs
• Soc Sec scheme for unorganised workers
• Weather-based crop insurance schemes
• Rs 14,365 crore for North-East
• Overseas investment exceeds portfolio investment
• Road-Rail projects in Bihar, Assam to be National Projects
• Allocation for textile parks up from Rs 189 cr to Rs 425 cr
• 330 districts under job guarantee scheme
• Rural landless households covered under AABY
• Focus on mega power projects
• Rs 3983 cr allotted for rural electrification
• UMPPs under review 2 to be approved by July
• FDI in April-Jan at $12.5 b
• Rs 22,452-crore subsidy to fertiliser
• Rs 1800 crore allocation for NABARD
• Tax exemption for Rs 5,000-cr NABARD bonds
• NABARD's rural bonds to get tax exemptions
• Govt to start weather-based crop insurance scheme
• Special funds for coffee, spices, rubber
• Education: Scholarship launched to arrest drop outs
• Rs 100 cr for new rainfed area development programme
• Rs 11000 cr outlay for irrigation projects
• Farm credit growth doubled in 2 years
• Rs 3794 cr allocated for primary education
• Rs 153 cr for high-yield milch animal scheme
• New scholarship for class VIII students
• School education up by 35%
• Rs 8795 cr for women-oriented schemes
• Scholarship for standard 9-12 students
• SC/ST allocation hiked to Rs 3271 cr
• NREGS to be expanded to 330 districts
• Education spend up 44.2% to Rs 32,352 cr
• Rs 750 cr for national scholarship scheme
• Bharat Nirman cornerstone of Govt policy
• Desired agriculture growth 4%
• Bank growth at 29.6% till Feb
• PDS system to be fully computerised
• Initial allocation for NREGS at Rs 12,000 cr
• Rs 15,291 crore earmarked for health
• Allocation for anti-AIDS programme at Rs 969 cr
• Agri investment to go up by 2% of GDP
• Allocation for NRHM hiked to Rs 9,947 cr
• Drinking water schemes allocation hiked to Rs 5,850 cr vs Rs 4,680 cr
• To substantially increase budgetary support for 11th plan
• Agri focus to benefit rural income & FMCG companies
• 31.6% increase in allocation for Bharat Nirman programme
• Panel set up to probe future trade in food items
• No new forward contract in wheat, rice futures
• Per capita income for FY06 up 7.6%
• Economy at a stronger position than before
• Confident of moderating inflation
• Higher tech education spend
• 10th plan target of 8% nearly achieved
• Higher outlay for roads
• Hike in allocation for health
• Rs 4,000 cr more earmarked for RIDF in FY07
• 24 lakh irrigated hectares to be created in FY08
• Panel set up to probe future trade in food items
• No new forward contract in wheat, rice futures
• 7.83 lakh rural houses built upto Dec 2006
• Education spending up 44.2 per cent at Rs 32352 cr
• High rate growth can be continued in the current year too
• Until Feb 2007, forex reserves stood at $180 b
• Farm supply imbalances can disrupt growth
• Manufacturing has grown from 8.7% to 11.3%
• Average inflation for FY-7 estimated at 5.2-5.4%
• Government concerned about inflation
• Savings rate estimated at 32.4%
• Global commodity prices have exerted pressure on local prices
• Revenues are buoyant for the third year in succession
• Government committed to fiscal prudence
• High growth rate can be continued in the current year too
• Agri must top the agenda of policy makers
• Average agri growth during 10th plan to 2.3%, below desired level
• Have noticed sharp ups & downs in agriculture
• Savings rate at 32.4%
• GDP growth average at 8.5%
• Growth rate of GDP has improved to 9.2%
• Average growth rate during UPA years at 8.6%
• Finance Minister to begin Budget presentation at 11 a.m.
• 2 lakh people to benefit out of service tax exemption. Govt to lose Rs 800 crore as a result
• Service tax on Residents Welfare Associations whose members contribute more than Rs 3,000
• Excise duty for plywood reduced from 16 per cent to 8 per cent
• Water purification devices, small and big, fully exempted from excise
• Customs duty on polyester to be reduced from 10 per cent to 7.5 per cent
• Duty on sunflower oil to be reduced by 15 per cent
• Import duty of 15 specified machinery to be reduced from 7.5 per cent to 5 per cent
• Duties on seconds and defective reduced from 20 to 10 per cent
• An autonomous Debt Management Office in government to be set up
• An Expert Committee to be set up to study the impact of climate change in India
• Rs 50 crore to be provided for the Commonwealth Youth Games in Pune.
• Rs 100 crore for recognising excellence in the field of agricultural research
• Any requirement for security of the nation to be provided
• Backward Regions Grant Fund to be raised to Rs 5800 crore
• 1,396 Indian Technical Institutes to be upgraded to achieve technical excellence
• Rs 50 crore provided to begin work on vocational education mission for which Task Force in Planning Commission is chalking out a strategy
• CST rate to be reduced
• Reverse mortgage scheme for senior citizens
• Special Purpose Tea Fund to rejuvenate tea production
• Gross budgetary support in 2007-08 raised to Rs 2,05,100 crore from 1,72,728 crore in 2006-07. Of this, budgetary support to the Central plan will go up to 1,54,939 crore against 1,72,728 crore.
• Two lakh more teachers to be employed and five lakh more classrooms to be constructed
• Minimum Alternate Tax extended to I-T companies
• Extend service tax to development of telecom advertising
• No change in STT, capital gains tax
• Customs duty on plastics reduced to 7.5%
• Cash withdrawal tax limit hiked to withdrawals over Rs 50,000
• Dividend distribution tax raised to 15% from 12.5%
• Tax benefit on R&D extended by 5 years
• Fiscal deficit target at Rs 1,50,94 cr
• 1% education cess on all taxes
• ESOPs under FBT
• Capital gains tax on art works
• 1% additional cess on all taxes to fund secondary education
• Duty cuts from 5-3% to help domestic trade
• Effective corporate tax rate at 19.2%
• No excise on instant food mixes
• Advalorem duty on petrol, diesel cut to 6%
• Corporate tax surcharge scrapped for small companies
• No change in CENVAT rates
• No change in corporate income tax
• Tax exemption for Senior Citizens upto Rs 1.9 lakh
• Differential excise duty on cement
• Rs 1.2 lakh crore for States
• Goods and services tax from April 1
• Income tax exemption for women raised to Rs 1.45 lakh
• Income tax exemption hiked by Rs 10,000
• Import duty cut on medical equipment to 7.5%
• Income-tax code to be introduced
• Duty on food processing machines cut to 5%
• Irrigation and food processing tariffs cut to 5%
• Pet food duty cut to 20%
• Lower duty on edible oils
• Customs duty on polished gems cut
• Excise duty on cigarettes up by 5%
• Ad valorem duty on petrol, diesel down
• Customs duty on man-made yarn & poly fibre cut to 7.5%
• Watch, Umbrella duties cut to 5%
• Reduction in excise duty on umbrella parts, bio-diesel and water pipes
• Peak customs duty on non-agro products cut to 10%
• No change in service tax rate
• Hike in exise on cigarettes
• Coking coal exempted from customs duty
• Duties on PTA, MEG and DMT cut to 7.5%
• Rs 350 cr for Delhi for Common wealth games
• Government to encourage banks to lend to SMEs
• Central PSUs to invest Rs 1.6 lakh cr
• Separate schools for class 9-12
• PAN mandatory for security transactions
• Handlooms covered under TUF scheme
• Allocation for National Highways programme increased to Rs 10,667 cr
• 100% subsidy to small farmers, 50% subsidy for other farmers
• Mortgage guarantee companies to be set up
• To create 1 lakh jobs for physically challenged people
• Rs 750 cr allocated for setting up ITIs
• Rs 321 cr allocated for handloom sector
• Private companies invited to submit plans for certified seeds
• Mumbai to be converted into world-class financial city
• E-Governance expenditure hiked to Rs 179 cr
• Part of forex reserves for infrastructure projects
• Defence allocation up at Rs 96,000 crore
• Overseas investment to be allowed by individuals via MFs
• Golden quadrilateral project near completion
• RRBs asked to undertake branch expansion
• Allocation for tourist infrastructure up at Rs 520 cr
• Health insurance allocation for weavers hiked to Rs 321 cr
• Coir industry modernisation provision at Rs 22.5 cr
• Credit rating must for SMEs
• Soc Sec scheme for unorganised workers
• Weather-based crop insurance schemes
• Rs 14,365 crore for North-East
• Overseas investment exceeds portfolio investment
• Road-Rail projects in Bihar, Assam to be National Projects
• Allocation for textile parks up from Rs 189 cr to Rs 425 cr
• 330 districts under job guarantee scheme
• Rural landless households covered under AABY
• Focus on mega power projects
• Rs 3983 cr allotted for rural electrification
• UMPPs under review 2 to be approved by July
• FDI in April-Jan at $12.5 b
• Rs 22,452-crore subsidy to fertiliser
• Rs 1800 crore allocation for NABARD
• Tax exemption for Rs 5,000-cr NABARD bonds
• NABARD's rural bonds to get tax exemptions
• Govt to start weather-based crop insurance scheme
• Special funds for coffee, spices, rubber
• Education: Scholarship launched to arrest drop outs
• Rs 100 cr for new rainfed area development programme
• Rs 11000 cr outlay for irrigation projects
• Farm credit growth doubled in 2 years
• Rs 3794 cr allocated for primary education
• Rs 153 cr for high-yield milch animal scheme
• New scholarship for class VIII students
• School education up by 35%
• Rs 8795 cr for women-oriented schemes
• Scholarship for standard 9-12 students
• SC/ST allocation hiked to Rs 3271 cr
• NREGS to be expanded to 330 districts
• Education spend up 44.2% to Rs 32,352 cr
• Rs 750 cr for national scholarship scheme
• Bharat Nirman cornerstone of Govt policy
• Desired agriculture growth 4%
• Bank growth at 29.6% till Feb
• PDS system to be fully computerised
• Initial allocation for NREGS at Rs 12,000 cr
• Rs 15,291 crore earmarked for health
• Allocation for anti-AIDS programme at Rs 969 cr
• Agri investment to go up by 2% of GDP
• Allocation for NRHM hiked to Rs 9,947 cr
• Drinking water schemes allocation hiked to Rs 5,850 cr vs Rs 4,680 cr
• To substantially increase budgetary support for 11th plan
• Agri focus to benefit rural income & FMCG companies
• 31.6% increase in allocation for Bharat Nirman programme
• Panel set up to probe future trade in food items
• No new forward contract in wheat, rice futures
• Per capita income for FY06 up 7.6%
• Economy at a stronger position than before
• Confident of moderating inflation
• Higher tech education spend
• 10th plan target of 8% nearly achieved
• Higher outlay for roads
• Hike in allocation for health
• Rs 4,000 cr more earmarked for RIDF in FY07
• 24 lakh irrigated hectares to be created in FY08
• Panel set up to probe future trade in food items
• No new forward contract in wheat, rice futures
• 7.83 lakh rural houses built upto Dec 2006
• Education spending up 44.2 per cent at Rs 32352 cr
• High rate growth can be continued in the current year too
• Until Feb 2007, forex reserves stood at $180 b
• Farm supply imbalances can disrupt growth
• Manufacturing has grown from 8.7% to 11.3%
• Average inflation for FY-7 estimated at 5.2-5.4%
• Government concerned about inflation
• Savings rate estimated at 32.4%
• Global commodity prices have exerted pressure on local prices
• Revenues are buoyant for the third year in succession
• Government committed to fiscal prudence
• High growth rate can be continued in the current year too
• Agri must top the agenda of policy makers
• Average agri growth during 10th plan to 2.3%, below desired level
• Have noticed sharp ups & downs in agriculture
• Savings rate at 32.4%
• GDP growth average at 8.5%
• Growth rate of GDP has improved to 9.2%
• Average growth rate during UPA years at 8.6%
• Finance Minister to begin Budget presentation at 11 a.m.
Sunday, February 18, 2007
Do your tax planning
If you are liable to pay tax, tie up your tax planning exercise. As a law-abiding citizen paying taxes is most important so investing promptly in the right avenues to save tax assumes to save tax assumes importance. An individual can save tax up to Rs 100,000(Rs 1 lac)by investing in tax-saving investment avenues. These avenues range from the traditional Public Provident Fund(PPF), National Saving Certificate(NSC) and life insurance to the more dynamic(read market-linked) tax saving mutual funds(Equity Linked Saving Schemes-(ELLS)). These avenues not only help in tax planning but if selected well can also help individuals achieve their long term financial goals.
Thursday, February 15, 2007
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