Sops for urban India: Personal tax exemption limit up

Finance Minister Pranab Mukherjee’s Budget 2009 has offered a mixed tax bag for corporates and markets. But has increased the personal disposable income.

For corporates:

The septuagenarian has left the corporate tax unchanged at 30% plus surcharge of 10% of the corporate tax (for companies with profits above Rs 10 million) along with an education cess that amounts to 3% of corporate tax — totalling to 33.9%. It has hiked the Minimum Alternate Tax to 15% from 10%. Customs and excise duty structure has also been left unchanged. Also, the deadline for Corporate India’s demand for a rollout of Goods and Services Tax has been set as April 2010.

However, he abolished the Fringe Benefit Tax which was the bugbear of the industry. The tax, which added reams of paperwork to corporates but only Rs 10,000 crore or 3% of total direct tax collections to the government's kitty has finally been repealed.

For markets:

The Finance Minister left the Securities Tax unchanged but scrapped the Commodities Transaction Tax.

Aam Aadmi cheers:

Budget 2009 hiked the personal income tax exemption limit by Rs 10,000 for men and women. The limit for senior citizens was raised by Rs 15,000. Besides this, the 10% surcharge on personal income tax on income over Rs 10 lakh has been scrapped.