Union Budget 2009-2010 Discussion

[anilkalvani]

With the Union Budget 2009-2010 presented by Finance Minister Pranab Mukerjee commencing at 11am, what are your expectations/hopes from it?

My hopes as an entrepreneur are:
1. Increase the Excise exemption on turnover from the Current 1.5 crore to 2.5 Crores
2. Audit manditory from 40 lakh to 75 lakh.
3. Removal of Fringe Benefit Tax.

My hopes as an individual:
1. Earmark substantial amount for infrastructure and road development for Mumbai.
2. Increase Wealth Tax exemption from below 15 lacs to below 50 lacs.
3. Removal of Tax on Dividends.

Have a lot more but not coming to my mind right now. Any suggestions?

[muralisk]

I would like to see lot of people coming into the tax net so that the burden on the current tax payers is less and there by having rational tax levels.

Apart from that, I would like to see the various cess are abolished and ensure that the budget allocations are reaching the target audience.

I would also like to see that the tax exemption for the IT companies is done away with and it is just retained for the smaller ones. I see no reason for the large IT companies to still get this exemption.

[muralisk]

No matter what we expect from the budget, this is turning out to be a mere populist budget with higher allocations for all kinds of schemes. So far, no one has ever really measured the effectiveness of these schemes. Shame.

[deetee]

This 100% tax exemption on the political donations is only going to benefit political parties as they can demand more money on this cause-pure political agenda I suppose.

[SumitB]

It seems that a few SUVs and cars will be cheaper by atleast 5000/-.

"126. A specific component was added to the ad valorem duty of 24 per cent applicable to large cars and utility vehicles in June last year. In the case of vehicles of engine capacity below 2000 cc, this component was Rs.15,000/- per unit while for vehicles of higher engine capacity it was Rs.20,000/- per unit. These rates are now being unified at the lower level of Rs.15,000/- per unit."

Source

Any other impact?

[mmmjgm]

Originally Posted by anilkalvani

With the Union Budget 2009-2010 presented by Finance Minister Pranab Mukerjee commencing at 11am, what are your expectations/hopes from it?


3. Removal of Fringe Benefit Tax.

Hi Anil,

FBT - most entrepreneurs (SME) in India take refuge of avoiding taxes by expensing under the FBT expense heads. - Travel/Entertainment/Misc Allowances.

Now most or nearly about 90% of employees of small, large and medium sized companies get tax relief from IT under the FBT provisions. (Companies absorb the FBT tax outgo) and the tax results in barely a 6-7% taxable income as opposed to 33% in employees cases.

I doubt this will be moved out as the government does get some revenue, yes marginal but yes, it does loose out if it had taxed employees as compared before the FBT regime came into place.

There are more people who will be negatively impacted by the FBT being abolished.

I personally will not like to see it go away, it WILL lead to some what mid to senior management attrition in very rare cases.

Edit, he's already abolished it. Sheesh. Bad luck.

Cheers
M

[tj123]

Is there any specific impact on the auto sector due to duty structure changes ?

[SumitB]

My reading is that the only benefit to the auto sector will be this:

"126. A specific component was added to the ad valorem duty of 24 per cent applicable to large cars and utility vehicles in June last year. In the case of vehicles of engine capacity below 2000 cc, this component was Rs.15,000/- per unit while for vehicles of higher engine capacity it was Rs.20,000/- per unit. These rates are now being unified at the lower level of Rs.15,000/- per unit."

[pypkmsrikanth]

I thought the prevailing bad times would be a good incentive for the government to reduce tax rates or may be reduce individual tax liablity, hardly anything worthwhile, the only benefit possibly could be the abolition of surcharge on personal income tax. I was hoping against hope that the budget might give some excise duty cuts on petroleum products to offset the price increase which was made last week.

No wonder markets have tanked.

[vijaythacker]

not much then minor changes on this years finance budget.
Be back after updates.

[kannan666]

IT exemption limits have been increased. The exemption limit will now be Rs 240,000 for senior citizens, Rs 190,000 for women and Rs 160,000 for others.

[tsk1979]

Nothin in it specifically for the auto industry.
Hardly the kind of budget which will give stimulus to the economy.
This budget has been made keeping populist sentiments in mind. No bold moves, no unshackling the economy.
No wonder the stock market crashed.

[mjothi]

Originally Posted by mmmjgm

FBT - most entrepreneurs (SME) in India take refuge of avoiding taxes by expensing under the FBT expense heads. - Travel/Entertainment/Misc Allowances.

Now most or nearly about 90% of employees of small, large and medium sized companies get tax relief from IT under the FBT provisions. (Companies absorb the FBT tax outgo) and the tax results in barely a 6-7% taxable income as opposed to 33% in employees cases.

I doubt this will be moved out as the government does get some revenue, yes marginal but yes, it does loose out if it had taxed employees as compared before the FBT regime came into place.

The problem is govt expense more than what it gets as FBT for logistics related to FBTs.

I guess so, they have removed it now. Good to hear.

[bharanidharang]

Originally Posted by deetee

This 100% tax exemption on the political donations is only going to benefit political parties as they can demand more money on this cause-pure political agenda I suppose.

I think this is a good move. All Black money donation to political will slowly turn white. I dont they are bothered about what an individual contributes (but shows in his return), but they would know how much money each Party is getting (this is good).

Another good point is the removal of income tax surcharge but this will have impact only to those who earn more than Rs. 10 lacs a year.

[muralisk]

Originally Posted by mmmjgm

Hi Anil,

FBT - most entrepreneurs (SME) in India take refuge of avoiding taxes by expensing under the FBT expense heads. - Travel/Entertainment/Misc Allowances.

Now most or nearly about 90% of employees of small, large and medium sized companies get tax relief from IT under the FBT provisions. (Companies absorb the FBT tax outgo) and the tax results in barely a 6-7% taxable income as opposed to 33% in employees cases.

I doubt this will be moved out as the government does get some revenue, yes marginal but yes, it does loose out if it had taxed employees as compared before the FBT regime came into place.

There are more people who will be negatively impacted by the FBT being abolished.

I personally will not like to see it go away, it WILL lead to some what mid to senior management attrition in very rare cases.

Edit, he's already abolished it. Sheesh. Bad luck.

Cheers
M

Before, PC brought in this tax, there about 3 or 4 countries in the world who have this kind of a tax.

Very few companies are ready to pay the additional tax burden and many IT companies started paying their employees so that the benefit gets taxed at employee end and at the prevailing IT rate.

Hence, it is good to see it go.