Increase in MAT rates from 18.0% to 18.5%. However no material change in effective MAT rate on back of reduction in surcharge.
Surcharge for domestic companies reduced to 5% from 7.5%. This would lead to reduction in normal corporate tax rate by 75bps.
MAT and DDT would now be levied on SEZ developers as well as units operating in SEZ.
Dividend from foreign subsidiary to be now taxed at 15% from earlier full tax rate.
Indirect Taxation: Excise Duty:
Central Excise Duty rate kept unchanged at 10%.
Nominal Central Excise Duty of 1% imposed on 130 items entering in the tax net which were earlier exempt.
Concessional rate of Central Excise Duty enhanced from 4% to 5%.
Peak Customs Duty rate kept unchanged at 10%.
Customs duty rates of 2%, 2.5% and 3% has been rationalized to a mean of 2.5%.
Standard Service Tax rate kept unchanged at 10%.
Service Tax on air travel both domestic and international raised.
Hotel accommodation in excess of Rs1,000 per day, air conditioned restaurant with bar, air conditioned hospitals with 25 or more bed and certain legal services have been brought under the ambit of Service Tax.
Infrastructure -Addressing Funding:
Allocation towards Infrastructure has been increased by 23.3% to Rs2,140bn for FY12, ~48.5% of the gross plan budgetary allocation.
FII limit for investment in infrastructure corporate bonds has been raised from USD5bn to USD25bn with residual maturity of over five years.
Allocation for Highways lowered by 20.6% to Rs133bn. However, NHDP allocation increased by 9.2% to Rs103bn.
Government enterprises has been allowed to raise tax free bonds of Rs300bn.
A new comprehensive policy on PPP is under the framework.
Allocation for urban infrastructure increased by 52.5% to Rs80.5bn.
Budget Allocation to major schemes: Bharat Nirman - From Rs480bn to Rs580bn, up 21% North Eastern Region -From Rs54bn to Rs80bn, up 48% NHDP- From Rs95bn to Rs103bn, up 9%
Social spending -Health & Education- Planned social sector outlay up 14% to Rs1,451bn.
Overall allocation for education increased by 24% to Rs521bn. Sarva Shiksha Abhiyan allocation up 40% to Rs210bn. Scholarship Scheme introduced for Scheduled Castes and Scheduled Tribes studying in classes ninth and tenth (4mn students to get benefit).
NREGA scheme outlay maintained at Rs401bn. Wages has been linked to CPI index w.e.f. January.
Mid day meal scheme allocation increased by 10% to Rs104bn.
Health allocations increased by 20% to Rs267.6bn.
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