Budget 2012 - Key Highlights

The Budget 2012, contrary to many expectations, turned out to be a rather low profile one. No revolutionary measures were introduced except some of the already anticipated changes. Here's a look at significant features of Union Budget 2012:

Disinvestment Policy:
For FY 2012-13, Rs 30,000 crore to be raised through disinvestment.
Foreign Direct Investment: Efforts are on to arrive at a broad-based consensus to allow FDI in multi-brand retail upto 51%

Tax Reforms:

• Direct Tax Code  (DTC) Bill to be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee.
• Drafting of model legislation for the Centre and State Goods Services Tax in concert with States is under progress.
• GST network to be set up as a National Information Utility and to become operational by August 2012
• Tax burden for individuals to come down: Income tax exemption limit raised from Rs.180,000 to Rs2,00,000; 10% tax for Rs.200,000 to Rs.500,000 Income; 20% for Rs.500,000 to Rs.10,00,000 and 30% beyond Rs.10,00,000; 
• Savings bank account interest up to Rs10,000 exempted from tax
• Senior citizens not having income from business proposed to be exempted from payment of advance tax
• Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of 50% to new retail investors (whose annual income is below Rs 10 lakh), who invest upto Rs 50,000 directly in equities. The scheme will have a lock-in period of 3 years

Infrastructure and Industrial Development:

• During 12th Five Year Plan period, investment in infrastructure to go up to Rs 50 lakh crore, half of which is expected from private sector.
• Tax free bonds of Rs 60,000 crore to be allowed for financing infrastructure projects

Attracting foreign funds: 
Efforts on to allow FDI in multi-brand retail and permitting foreign airlines invest in domestic players; External borrowings to the extent of $1 billion for aviation companies; Qualified Foreign Investors to get access to corporate bond market.

Indirect Taxes:

• Standard rate of excise duty to be raised from 10% to 12%, merit rate from 5% to 6% and the lower merit rate from 1% to 2% with few exemptions.
• Service Tax Rate raised to 12%
• Excise duty on large cars also proposed to be enhanced. 3. Indirect taxes estimated to result in net revenue gain of Rs.45,940 crore