Budget Highlights: Key Points from Budget 2012 | YourBloggingTips

Indian Budget 2012-13 has been provided today (i.e. 16-Mar-2012) by our Finance Minister – Pranab Mukherjee. I have provided Budget 2012 Highlights, its effects, reactions of various communities & final verdict. Also, check out Pranab Mukherjee in Recorded Live Action during his speech in the Parliament.

Key Budget 2012 Highlights

		Budget Paper – Key Highlights – sector by sector in bullet points.

Actual Budget Paper presented in Parliament by Hon. Pranab Mukherjee

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A. New Tax Slabs: The Finance minister has increased the tax slabs and given relief to the common man. Especially for the people in the below 10 lakh slab. Greater news for those earning between 8 Lakh and 10 lakh, they move from a slab of 30% to a new slab of 20%. The minimum tax slab has been increased from Rs.180000/- to Rs. 200000/-.

Tax Slabs Range	% Tax Rate
Upto Rs. 200,000	Exemption
Rs. 200,000 to 500,000	10%
Rs. 500,001 to 10,00,000	20%
Above Rs. 10,00,001	30%

B. Exemption to Homeowners: The homeowners of apartments can enjoy tax exemption of Rs. 5000/. Spent on maintenance.  This exemption level has been increased from Rs.3000/- to Rs. 5000/-.

C. Capital Gains:

• The Capital Gains Tax will not be applicable for people who use the amount generated from the sale of their houses as an equity investment in small and medium businesses.
• Reduction in securities transaction tax by 20% on cash delivery transactions to 0.01%

D. Health Exemption: Exemption permitted upto Rs. 5,000/- for expenses incurred on Preventive Health Check up

E. Income from Other Sources: Exemption of Rs. 10,000 on interest earned from Savings Bank deposits for people with income upto Rs 5 Lakh

F. Invest in Equity and get tax exemption - Rajiv Gandhi Equity Saving Scheme will get 50% income tax deduction. This will be applicable only to the New Retail Investors investing directly into equity up to Rs. 50,000/, with a lock in period of three years. The annual income of the investor should be less than Rs. 10,00,000/-.  Changes have been made in the IPO guidelines in order to ensure the participation from small towns.

Union Budget Highlights 2012-13 | YourBloggingTips

Budget 2012 Expectations – Source:TOI

This year and the previous one - it's been different: The Union budget will be presented on 16th March, 2012. Historically, with the economy running almost on auto pilot, the budget has always taken a back seat when it comes to impact on markets. However, the macro backdrop is certainly different this year and the previous one. This year's budget assumes particular importance due to the ongoing macroeconomic problems within the domestic economy.

Frugal, reformist and pro-growth budget?: Given the investment-led slowdown in the economy, with a need for fiscal pump-priming on one hand, and steadily deteriorating public finances on the other, the budget needs to be frugal, reformist and pro-growth at the same time. Not an easy task, given the (populist) demands of the realpolitik. Moreover, the recent assembly election results in UP, Punjab, Uttarakhand, Goa and Manipur have left the current UPA-2 government at the centre on a back foot. The budget would thus reveal Congress' response and the way forward for the next 18 months - whether it turns more 'populist' or muddles along.

Two most important aspects that are key to the FY13 budget are:

• Roadmap on fiscal consolidation
• Policy measures/proposals aimed at improving overall sentiment and infrastructure investment

Balancing growth with deteriorating finances: The government is walking the tightrope with growth concerns on one hand, and its deteriorating finances on the other. What makes it trickier is the lack of headroom this government has, to provide a fiscal boost to support growth, like the way it did back in 2008-09. On the other hand, it needs to announce enough policy measures to address the visible slowdown in economic activity. Though the Union Budget is not a platform to announce 'non-budgetary' reforms, the government can use the opportunity to do so, as it has in the past, in order to mitigate the prevailing negative sentiment. However, the key need of the hour is for provisions enabling a revival in investment activity in the economy.