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Old 16th March 2012, 13:04   #1
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Default Union Budget 2012 and impact on us

This is one of those days for which we wait egarly, and as the budget has been presented, its going to impact our life for next one year, lets discussed the point which will concern us every day after this budget.

Few point I recollect
  • PF interest slashed
  • Personal income exemption till 2L
  • Cars to cost more(which cars - all or Luxury? Petrol or Diesel?)
  • Has the investment cap increased?
  • LCD, LEDs to cost less
  • No service tax on education
  • Excise duty on big cars increased(what defines big cars?)
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Old 16th March 2012, 13:07   #2
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Default Re: Union Budget 2012 and impact on us

Also, I think the excise increase for diesel vehicles has not been implemented. Good news for the diesel car buyers.
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Old 16th March 2012, 13:09   #3
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Default Re: February 2012 : Indian Car Sales & Analysis

How is the 2012 Budget going to affect Auto Sales? Whats in it for us?

(Mods please move it/merge it into a separate thread if required.)

IMHO. No major Updates really. A big relief, no additional duty on Diesel cars as of now (Atleast from the outline there doesn't seem to be one). However it may not remain so for a long time. (Read on Subsidies could be changed depending upon feasibility). Was hoping there would be some talk about Diesel price de-regulation at-least!

What's Increased:

# Excise duty hiked to 12%: Standard excise duty raised to 12% from 10%. This will affect car prices.

# Excise duty on big cars raised to 24%. (I don't know what was it earlier). So, I am not sure about the impact. By the way, are all non-small cars considered big cars? I guess so!

# Service tax rate hiked to 12 % from 10%. Should affect all car servicing etc. Should be minor impact though.

What's not:
# No explicit mention of Additional excise duty on Diesel Cars. Oil burners should continue to rule the sales charts.

Cheers!

Last edited by naut : 16th March 2012 at 13:13. Reason: Removed an un-necessary line.
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Old 16th March 2012, 13:09   #4
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Default Re: Union Budget 2012 and impact on us

You mean the Rajiv Gandhi Budget 2012?

/Its hopeless. More money being thrown in ever newer schemes - ultimately hitting us taxpayers
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Old 16th March 2012, 13:11   #5
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Default Re: Union Budget 2012 and impact on us

PF rates slashed. What does this mean to people?
Shove more of them into the stock market?
They should change the name of this fund. Its not Provident, but poverty fund now.
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Old 16th March 2012, 13:14   #6
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Default Re: Union Budget 2012 and impact on us

There was a rumor that long term Bank deposits(5yr) which were tax free, will have less lock-in period(3yrs), but no news on it.

What about home loan interest payment cap increase?
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Old 16th March 2012, 13:15   #7
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Default Re: Union Budget 2012 and impact on us

Few more highlights from Union Budget: 2012-13. Overall - it seems to be usual one IMO. We save some from income tax and spend it on higher service tax & reduced PF Interest charges .

Quote:
FINANCE MINISTER ON GOVERNANCE

"We have to accelerate the pace of reforms and improve supply side management of the economy."

FISCAL DEFICIT

* Fiscal deficit seen at 5.9 percent of GDP in 2011-12

* Fiscal deficit seen at 5.1 percent of GDP in 2012-13

BORROWING

* Net market borrowing seen at 4.8 trillion rupees in 2012-13

SPENDING

* Total expenditure in 2012-13 seen at 14.9 trillion rupees, up 29 percent

* Plan expenditure budgeted at 521.25 billion rupees in 2012/13, up 18 percent

REVENUE

* Proposes to raise service tax rate to 12 percent from 10 percent

* Gross tax receipts seen at 10.8 trillion rupees in 2012-13

* Non-tax revenue seen at 1.64 trillion rupees in 2012-13

* Proposes to levy tax on all services except 17 items in the negative list from 2012/13

* No change in corporate tax rates

* To enhance tax exemption limit to 200,000 rupees for individuals income in 2012/13


GROWTH AND INFLATION EXPECTATIONS

* Expect headline inflation to moderate in next few months and remain stable thereafter

* Economy expected to grow at 7.6 percent in 2012/13, plus or minus 0.25 percent

* Economy expected to grow at 6.9 percent in 2011/12

* Signs of economy turning around in March quarter

POLICY REFORMS

* Hope to achieve "broad-based consensus" to open multi-brand retail sector to foreign investors

* Allow external commercial borrowing of up to $1 bln to raise working capital for airlines industry for 1 year

* To allow qualified foreign investors in Indian corporate debt markets

* To allow external commercial borrowing to part finance rupee debt in power projects

* Proposes to remove sector-specific restriction on venture capital fund investments

SECTOR SPENDING

* Allocates 1.94 trillion rupees for defence in 2012/13, up from 1.64 trillion rupees in previous year

INFRASTRUCTURE DEVELOPMENT

* To award contracts to build 8,800 km of roads in 2012/13

* Govt doubles allocation for tax-free bonds to 600 billion rupees for financing infrastructure projects in 2012/13

DISINVESTMENT

* Disinvestment target in 2012-13 of 300 billion rupees

* Expects country to become self-sufficient in urea production in five years

* Proposes to raise agricultural credit target in 2012/13 to 5.75 trillion rupees

SUBSIDIES

* To keep 2012/13 subsidies under 2 percent of GDP

* To inject 159 billion rupees to capitalize state-run banks in 2012/13

CURRENT ACCOUNT

* Current account deficit seen at 3.6 percent of GDP in 2011/12

* Expect smaller current account deficit in 2012/13

New Income tax slabs for 2012-13

*Up to 2 lakh rupees - NIL
*2 lakh - 5 lakh rupees - 10%
*5 lakh - 10 lakh rupees - 20%
*Above 10 lakh rupees - 30%

Mukherjee also said there will no change in corporate tax rates.

Courtesy: Reuters

Highlights: 2012/13 Budget presented to parliament | Reuters

http://in.reuters.com/article/2012/0...82F04T20120316

Last edited by maheshramaling : 16th March 2012 at 13:24. Reason: Formating went wrong
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Old 16th March 2012, 13:18   #8
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Default Re: Union Budget 2012 and impact on us

As per one budget highlight there has been a raise in customs duty on some vehicle imports to 75% from 50% and in another highlight it says big cars cost more, import duty up to 27%. Need to read the fine print to get a clarity
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Old 16th March 2012, 13:18   #9
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Default Re: Union Budget 2012 and impact on us

What ;s a Shocker is the reduction in PF interest rates from 9.5 % to 8.25 % straight .

cars to cost more by 2 % and IMO they have hiked the excise on petrol, so expect long queue ;s on pumps tonight .On luxury Big cars also, they have Increased taxes .

Quote:
Originally Posted by asdon View Post
  • LCD, LEDs to cost less
Any Ideas how much the reduction is for above category. good that i deferred my purchase .

Edit :- Excise duty on big cars raised to 27%

Last edited by .sushilkumar : 16th March 2012 at 13:24.
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Old 16th March 2012, 13:19   #10
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Default Re: Union Budget 2012 and impact on us

@Mahesh - There is a mistake in the above post, the report you are quoting is from April, 2011, please correct it, the new slab is till Rs 2 Lakh not 1.8L.
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Old 16th March 2012, 13:25   #11
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Default Re: Union Budget 2012 and impact on us

Quote:
Originally Posted by asdon View Post
[*]Excise duty on big cars increased(what defines big cars?)[/list]
All petrol cars with engine capacity under 1.2 L and diesel cars under 1.5 L which are less than 4 meters in length are classified as small cars from excise duty perspective.
All other cars are classified as big cars. The excise duty for these 'big cars' have been increased from 22% to 24% which would mean the price of these cars will go up by 2%.
Contrary to wide speculations, there has been no increase on excise duty of diesel cars!

Last edited by sandsun7 : 16th March 2012 at 13:40.
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Old 16th March 2012, 13:27   #12
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Default Re: Union Budget 2012 and impact on us

PF rates slashed decision is not part of the budget but was taken a day (maybe 2) before.
The tax slab change is moderate and is really disappointing. I think its a pretty bad budget with no boost to any sector except some consolidations here and there.
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Old 16th March 2012, 13:32   #13
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Default Re: Union Budget 2012 and impact on us

Not Extra tax on diesel cars!! Sad though that service tax and excise duty has been increased by 2%, got to pay more now for restaurants,hotels, travel!!

Has duty on large cars been increased to to 27% or 24%?? some news channels are saying 24% others 27%.And what does large cars mean??Only SUV's?? or all cars with engines bigger than 1500cc??

EDIT:Read sandsun7 post.If thats true then its sadening! So now the ex-showroom prices of cars will go up or will it be increase in road tax??I am not well versed with these things!

Last edited by rambo1o1 : 16th March 2012 at 13:35.
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Old 16th March 2012, 13:33   #14
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Default Re: Union Budget 2012 and impact on us

Maruti to hike prices immediately.

Reacting after hike in excise duty on cars in the Union Budget, India's leading car manufactures Maruti says that it will increase car prices immediately

Union Budget 2012 – Live Update and Highlights on Union Budget 2012 – Times of India
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Old 16th March 2012, 13:35   #15
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Default Re: Union Budget 2012 and impact on us

Will the "No change in corporate tax rate" impact our % increment?
  • Gold is going to cost more
  • No mention of infrasture bonds, if they are going to stay
  • What is the cap limit for woman individual for income tax? no mention
  • Medicine price will reduce but how much?
  • Petrol price definitely going up
  • RBI differred rate cuts, so no hope of low emi on home loans
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