Union Budget 2012-13 : Highlights

There are many high points of budget which has been proposed for the year 2012-2013. All the points of the Union Budget made for  upcoming accounting year has been presented by Finance Minister of India, Pranav Mukherjee, on 16^th March 2012. Highlights of the proposed budget have been mentioned here.

Now more people will be relieved from the burden of paying tax on their income. This is because limit of  tax exemption  has been increased from Rs 180000 to Rs 200000. This means that individuas whose income lies between 2-5 Lakhs will pay  10% and 5-10 Lakhswill pay 20% as tax. Adding to it, individuals whose income is more than 10 Lakhs rupees will need to pay 30 per cent of their income as Income Tax . At the same time, interest up to Rs 10000 in Savings Bank Account has been exempted from tax. Many luxurious goods have been proposed to cost more. This includes large cars, imported jewellery and imported bicycles. Cigarettes and bidis have also been included in this list. However, it has been proposed that silver jewelry may have higher demand as it will be relatively cheaper. There is no change in certain tax rate like corporate tax but rate of excise duty, service tax rate has been raised to 12 per #162 which was previously 10. Therefore, it can be concluded that more emphasis has been given on high class people for paying tax than middle class people.  

More money has been expected to be collected by the government this year. GDP growth rate for 2012-2013 pegged at 7.6% and Rs 30000 crore has been targeted to be raised from disinvestment. Adding to it, higher tax rate revenue has been targeted and expenditure on subsidy is also to be checked. More amount of money will be provided for capitalization of public sector banks and financial institutions as Rs 15888 crore has been budgeted.

Turnover limit for compulsory tax audit for SMEs has been raised from 60 Lakhs rupees to Rs. 1 crore. This will be a relief for certain sectors. This includes sectors such as mining, railways, roads, civil aviation, agriculture, infrastructure and manufacturing. Agriculture has been favored by the budget as farmers will be provided interest subvention for short-term loan at 7% and 3% additional for prompt paying. At the same time, agricultural credit has been raised to Rs 575000 crore.

Budget of total expenditure has been presented as Rs 1490925 crore; plan expenditure has increased 18% when compared to that of previous year’s budget. It is proposed as Rs 521025 crore. On the other hand, non-plan expenditure has been budgeted as Rs 969900 crore. Thus, net tax to be collected this year is being estimated as Rs 771071 crore, non tax revenue has been estimated as Rs 164641 crore and capital receipts has been estimated as Rs 41650 crore. 193407 crore rupees have been proposed to be allotted for defense services.