Reform Oriented Budget Pushed for!Pranab is not happy with RBI as he considers hard monetary policies are responsible for slower Growth Rate. What would he say about the Fiscal Deficit unabated? Forgone taxes? and Bail Out undeclared?

Reform Oriented Budget Pushed for!Pranab is not happy with RBI as he considers hard monetary policies are responsible for slower Growth Rate. What would he say about the Fiscal Deficit unabated? Forgone taxes? and Bail Out undeclared?

Bring rich farmers under income tax ambit, says Assocham

Identifying the negative list of services should be taken up with GST, says IIA

Provide adequate stimulus to the priority areas within urban housing, says RICS

Exporters unlikely to get tax incentives

Aaadhar-Enabled Unified Payment Infrastructure report presented to Pranab Mukherjee

Indian Holocaust My Father`s Life and

Time - EIGHT HUNDRED SEVEN

Palash Biswas

http://indianholocaustmyfatherslifeandtime.blogspot.com/

http://basantipurtimes.blogspot.com/

1. [PDF]

2. Budget and Fiscal Plan 2010/11 - 2012/13

3. www.bcbudget.gov.bc.ca/2010/bfp/2010_Budget_Fiscal_Plan.pdf
4. File Format: PDF/Adobe Acrobat
5. Budget and Fiscal Plan – 2010/11 to 2012/13. TABLE OF CONTENTS. Budget and Fiscal Plan 2010/11 – 2012/13. March 2, 2010. Attestation by the Secretary to ...
6. [PDF]

7. Pre-budget Memorandum for Union Budget 2012-13 Sl. No ...

8. www.icsi.edu/WebModules/.../Pre-Budget1_Memorandum.pdf
9. File Format: PDF/Adobe Acrobat - Quick View
10. for Union Budget 2012-13. Sl. No. Subjects of Suggestions. 1. Income Tax. (A) Corporate Taxation. (B) Personal Taxation. (C) Miscellaneous. 2. Central Excise ...
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12. Pre Budget Proposals (2012-13) - APEDA

13. www.apeda.gov.in/apedawebsite/.../Pre_Budget_Proposal_2012_13....
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15. You are requested to furnish your Pre Budget Proposals (2012-13) as per the prescribed Proforma I & II, (enclosed ). The detailed guidelines for formulating of …

1. Budget 2012-13: Rs 5000cr rescue plan for Air India - Hindustan ...

2. www.hindustantimes.com/.../Budget-2012-13.../Article1-815575.asp...
3. 10 hours ago – Air India, the ailing public sector airline, may get Rs 5000 crore in the next budget to get out of the red while banks will be given Rs 10000 crore ...

4. Budget 2012-13: Indian Union Budget 2012-13, Pre-Budget India ...

5. budget.moneycontrol.com/
6. Budget 2012/Union Budget 2012: News on Budget 2012, Budget 2012 Expectations and Highlights for India Union Budget and Railway Budget for the year ...

7. Budget 2011 - New Income Tax Rates FY 2011-12 (AY 2012-13)

8. www.taap.co.in/index.php?...budget...2012-13...
9. Budget 2011 - New Income Tax Rates FY 2011-12 (AY 2012-13)

10. What do you expect from Budget 2012/13? | The Great Debate (India)

11. blogs.reuters.com/great.../what-do-you-expect-from-budget-201213/
12. 7 hours ago – What is your budget wishlist for this year? What should the income tax slabs look like? Which investment products should be added or removed ...
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14. Programme and Budget for the biennium 2012-13

15. www.ilo.org/public/english/bureau/program/.../12.../pbfinalweb.pdf
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17. Formatted by TTE: reference Programme and Budget 2012-13-[2011-07-0009-1]-En.doc/v4. Printed by the International Labour Office, Geneva, Switzerland ...

18. Budget 2012-13: Pre-Budget News, Union Budget Updates, Budget ...

19. economictimes.indiatimes.com/budget2012.cms
20. Budget 2012 News, News Highlights Union Budget 2012-13: ET brings you 360 degree coverage of the Budget 2012-13. India Budget 2012 Finance Minister ...

    *	EconomicTimes Gujarati +1'd this

21. [PDF]

22. Scottish Spending Review 2011 and Draft Budget 2012-13

23. www.scotland.gov.uk/Resource/Doc/358356/0121130.pdf
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25. with the Draft Scottish Budget 2012-13 for consultation with the Scottish Parliament and the people of Scotland. When this Government was first elected in 2007, ...

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Finance Minister Pranab Mukherjee is perhaps the most Tormented person in the country these days. The Plicy Makers, India incs, Media and foreign Capital press for a Reform Oriented Budget while  Pitching for a virtual "please all" Budget 2012, Congress leaders in their wish-list asked Finance Minister Pranab Mukherjee to raise income tax slabs, reduce interest rates and earmark more funds for poverty alleviation programmes. Congress leaders also demanded that the forthcoming Budget should focus on poverty alleviation programmes by raising allocation for schemes like MNREGA, National Rural Health Mission(NHRM) and Bharat Nirman.

On the other hand,in a suggestion that may not go well with political leaders, industry chamber Assochamtoday urged the government to bring rich farmersunder the ambit of income tax to increase revenue generation. While, Identifying the negative list of services should be taken up with GST, says IIA!Provide adequate stimulus to the priority areas within urban housing, says RICS!

Pranab is not happy with RBI as he considers hard monetary policies are responsible for slower Growth Rate. What would he say about the Fiscal Deficit unabated? Forgone taxes? and Bail Out undeclared?

Exporters unlikely to get tax incentives!

With the government hard pressed to reduce fiscal deficit, exporters are unlikely to get tax incentives in the Budget for 2012-13 to be presented by Finance Minister Pranab Mukherjee next month.

"Finance Ministry's fiscal room for manoeuvre has gone. They are in a tight fiscal situation, who is going to give you sops," a senior Commerce Ministry official said.

In order to arrest deceleration in export growth, the Federation of Indian Export Organisations (Fieo) has urged the government to give complete exemption of excise duty on handmade carpets, reduction of excise duty on man-made fibres and service tax exemption on ECGC premium and on currency conversion for exports.

The exporters are also demanding exemption ofminimum alternative tax on special economic zones, key exporting hubs.

From a peak of 82 per cent in July 2011, export growth has slipped to 44.25 per cent in August 2011, 36.36 per cent in September 2011, 10.8 per cent in October last year and 10.1 per cent in January.

Mukherjee, according to the official, may not provide tax incentives as his foremost priority would be to bridge the fiscal deficit, which is the gap between revenue and expenditure.

During the current year, the fiscal deficit is expected to exceed the budget target of 4.6 per cent of the Gross Domestic Product (GDP), mainly on account of rising subsidy bill and poor realisation from sale of equity in state-owned companies.

Commerce Secretary Rahul Khullar has recently said that the country's exports are going to face difficulties during the coming months due to the global economic uncertainties.

However, exporters too are not optimistic about announcement of fiscal incentives in the Budget.

"Looking at the current revenue situation of the government, we are not expecting much in the Budget. It is not possible for the Finance Minister to extend fiscal benefits to us," Fieo Director General Ajay Sahai told PTI.

In the last Budget, the government had allowed exporters to do self-as customs authorities, a moved aimed at fastening the clearance of the cargo by customs authorities.

The finance minister also allowed duty-free import of some inputs used in the manufacture of leather and textile products for export purpose.

In a pre-budget memorandum to Finance Minister Pranab Mukherjee, the chamber has said the government should set up an expert panel for taxing the agriculture community to up to 20 per cent over a period of time depending on the income of individuals. Currently, there is no tax on agricultural income.

"We have requested the government to bring agriculture under the tax net. Nowadays, many corporates have gone into agriculture. Agriculture sector should be divested to increase revenue generation," Assocham President Rajkumar Dhoot told reporters here.

He, however, said farmers with very less income should be spared from any taxes.

"Why should big farmers not be taxed? There is a tax exemption limit on income. If that is crossed, farmers should also be taxed," Dhoot said, adding 80-90 per cent of farmers are poor and should not be taxed.

The industry body has suggested that a farmer with up to 10 hectares of land should not be taxed at all, Dhoot said.

He said a farmer owning cultivated land of up to 20 hectares should be taxed at the rate of 5 per cent, while those having 20-50 hectares of land should be imposed 10 per cent tax.

"Besides, large farmers having 50 hectares or more land should attract a tax of 20 per cent," Dhoot said, adding in all cases, the productivity of the land should be taken into account while imposing any tax.

In their suggestion to the Finance Minister, Assocham said farmers should not be brought under the tax net immediately and an expert panel should be formed to see how farmers could be taxed over a period of time, he added.

Indian Industries Association (IIA), an apex representative body of Micro, Small & Medium Industries said that the exercise of identifying the negative list of services should be taken up with GST. Doing so at present will complicate the system of Service tax un-necessarily.

It said that in the Union Budget 2012-13, the concept of "Reverse Charge" in the Goods transport services must be done away with. Only transporters must collect and deposit service tax on GTS services. All categories of GTS service availers be allowed to de-register from service tax and thus finally put an end to duplication of same work.

Also, the general rate of tax has been reduced from 12% to 10% w.e.f. 24-02-2009. Historically the rate of service tax has always been less than the Central rate of excise duty. In wake of rampant inflation over the years, cost of services has gone up manifold. On top of this extent of coverage of services under service tax has also widened enormously. Taxing services @ 10% is contributing hugely to general inflation and is also an incentive for evasion.

Therefore, rate of service tax must also be moderated down to not exceeding 8% in line with the general rate of Excise Duty.

IIAA demands that as per service tax notification no. 33/2004 dated 3rd Dec 2004, there is no liability of service tax on transportation of Milk, Eggs, and Vegetables. This list had been further extended to Pulses also. The criterion for exemption appears to be the perishable nature of foods products being transported. Bread also falls in the same category hence Service tax on transportation of Bread should be exempted.

Other budget expectations of IIA are:

- Service tax was levied on Industry Associations in 2005 by clubbing them under 'Club or Associations Services' (excluding trade unions, political parties, farmers associations). Industry associations representing the cause of Micro Small and Medium Enterprises (MSME) are like Farmers Association / Trade Unions and they work for the public cause and clubbing them with entertainment clubs is unjust and unfair. Hence the liability of Service Tax on MSME Industry Association membership fee should be exempted.

- All kinds of surcharges and Cess should be merged with basic Service tax rates.

- Any entity registered under Service Tax Act / Rules should be allowed to render any other service which is taxable under Service Tax Act without requirement of any additional registration or modification in the existing registration.

- Threshold for applicability of Service Tax should be enhanced from Rs 10 Lacs to 15 Lacs. There should be a threshold limit of Rs 10.00 Lacs for Service recipients also which at present is nil. The cost of compliance for this is relatively very high for all such assesses who are otherwise not subject to any other service tax / Cenvat compliance obligations. Putting a threshold will facilitate taking out the small ticket Service Tax payers under this head.

Some of the Congress members, including senior ministers, at the pre-Budget consultations with the Finance Minister expressed concerns over slowdown and wanted him to announce steps to boost growth.

Mukherjee, who is scheduled to present the Budget on March 16 in Parliament, at the outset explained them the current economic situation in India in the context of the world scenario and financial constraints being faced by the government.

The senior leaders who attended the meeting included Ahmad Patel, political secretary to Congress PresidentSonia Gandhi, Corporate Affairs Minister Veerappa Moily, AICC media cell Chairman Janardan Dwivedi, Members of Parliament (MPs) Sanjay Nirupam and Girija Vyas, CWC member Shakeel Ahmed and Minority Affairs Department Chairperson Imran Kidwai.

"We demanded priority to industrial growth...and focus on banking sector", Congress MP T Subbarami Reddy, told reporters after attending the meeting.

Reddy also suggested that interest rates should be reduced to encourage industrial growth.

Some members urged Mukherjee to raise income tax exemption limit to provide relief to the salaried class. At present, income tax is levied on income above Rs 1.8 lakh per annum.

In its pre-budget memorandum for the real estate sector, RICS, a professional body for qualifications and standards in land, property and construction has said that it expects the Union Budget to provide adequate stimulus to the priority areas within urban infrastructure and housing.

RICS has highlighted the following measures that are required to be taken by the government for the real estate sector:

>> First, there is a dire need for the budget to encourage improvement in supply of affordable and low cost housing along with strengthening access to housing & micro finance.

> RICS has proposed the establishment of a dedicated affordable housing fund, similar to infrastructure funds. The Government could contribute partial funding through public issuance of bonds and the remaining component can be raised through retail investments in lieu of tax benefits. These funds should then be made available to developers/ NGO's/ private intermediates at low interest rates for construction of EWS/LIG housing.

> Low yields on rental housing remain a bottleneck for promoting a healthy rental market. Lowering the tax rate on rental income along with taxing a much lower percentage of the rental income would help incentivise rental housing. These steps are also likely to uplift consumer sentiment.

>> Given the rapid urbanisation and pressure on urban infrastructure, the budget should consider incentives and benefits for large scale residential townships; extend ECB limit whilst the Infrastructure Debt Fund needs to be supported with a robust bond market.

> RICS believes the definition of infrastructure could be broadened to include integrated townships of 100 acres or more. To encourage private investment capital, the Government should seek to catalyse private investment and operations into all infrastructure sectors through the participation of long term sources of capital such as insurance and pension funds and bond markets which have investible surplus.

> Given the pace of development in India and the fact that India's position on RICS carbon emission index has slipped to 9th last year from 7th in 2009-10 last, we expect continued support to the 'National Clean Energy Fund' as well as incentivising renewable forms of energy.

> It is also equally important to better address the significant issue of skill development, especially in real estate and construction sectors which are reeling under severe manpower shortage. Whilst funds have been allocated through various mechanisms, they need to be better channelized and utilised.

Aaadhar-Enabled Unified Payment Infrastructure report presented to Pranab Mukherjee
Finance Minister Pranab Mukherjee on Thursday said that Aadhaar-Enabled E-payment system would help not only in ensuring the timely payments directly to the intended beneficiaries, but would also help in reducing the time taken, transaction costs and the leakages among others.

Mukherjee, who was speaking after receiving the final report of the Task Force on Aaadhar-Enabled Unified Payment Infrastructure presented to him by Nandan Nilekani, Chairman UIDAI and the Task Force, said that this would also help in bringing transparency in the system and reducing avoidable delays.

Mukherjee further said that pilot projects be upscaled and implemented in more areas and in more States.

"So far, pilot projects are mainly implemented in the areas of LPG, kerosene, fertilizers and MGNREGS which can be further expanded," he added.

Union Agriculture Minister Shard Pawar, Rural Development Minister Jairam Ramesh, Minister of State (Independent charge) for Consumer Affairs, Food and Public Distribution, K.V. Thomas, Minister of State for Chemicals and Fertilizers, Srikant Jena, Secretaries of various Departments/Ministries and senior officials of Ministry of Finance and Planning Commission among others were present in today's meeting.

Earlier, the Chairman UIDAI and the Task Force, Nandan Nilekani, made a presentation highlighting the various recommendations made by the Task Force in its Final Report.

Nilekani said that a strategic transformation of the governance can be brought about by the usage of electronic payments across the board. He said that the Task Force has recommended a systematic platform based approach for the electronic payments.

The Task Force, which was chaired by Nandan Nilekani also included Secretaries of the Departments of Expenditure, Financial Services, Fertilisers, Petroleum, Agriculture, Rural Development, and Food and Consumer Affairs among others.

The members also included DG, UIDAI, Controller General of Accounts (CGA), and representatives from the NIC, RBI, IBA and NPCI.

The Task Force was constituted in September 2011 to recommend, inter alia, a detailed solution architecture for direct transfer of subsidy through a payments bridge wherein funds can be transferred into any Aadhaar-enabled bank account on the basis of the Aadhaar number.

The salient recommendations of the Task Force include that beneficiaries of all social safety net programs (MGNREGS, SSP, JSY, IAY, scholarships, etc.) and recipients of direct subsidy transfer payments (LPG, Fertilisers, kerosene, etc.) can greatly benefit by receiving their payments electronically, directly into accounts of their choice at either banks or post offices.

The Task Force report is available on the Ministry of Finance website www.finmin.nic.in.

1. Aaadhar-Enabled Unified Payment Infrastructure report presented to ... ‎ Economic Times - 4 hours ago NEW DELHI: Finance Minister Pranab Mukherjee on Thursday said that Aadhaar-Enabled E-payment system would help not only in ensuring the timely payments ... Expand e-payment pilot projects to more states, areas: Pranab‎ Zee News FM may announce direct cash transfer in budget‎ Hindustan Times Aadhaar panel favours e-payment for all social safety net schemes‎ Hindu Business Line mydigitalfc.com - domain-B all 14 news articles »

   * Hindu Business Line

2. IT network for goods and services tax by August: Pranab Mukherjee ‎ Economic Times - 20 hours ago NEW DELHI: India will soon roll out an IT platform to integrate central and state indirect taxes regime, Finance Minister Pranab Mukherjee has said. Pranab Mukherjee hopes to meet tax collection target in FY12‎ Daily News & Analysis Mukherjee says C/A deficit a matter of concern‎ IBNLive.com Make extra effort to meet tax target, Pranab tells CBEC‎ Hindu Business Line Invest in India - CIOL all 115 news articles »

   * Hindu Business Line

3. Govt will try to achieve 7.5-8% growth next fiscal: Pranab ‎ Hindustan Times - 10 hours ago PTI The government will endeavour to raise the economic growth rate to 7.5-8% in the next fiscal from about 7% currently, finance minister Pranab Mukherjee ... Govt will aim for 7.5-8 pc growth next fiscal: Pranab‎ Deccan Herald High CAD matter of concern; govt will manage it: Pranab‎ Economic Times India to target 7.5-8 percent growth in 2012-13: Pranab‎ TwoCircles.net The Asian Age all 158 news articles »

   * Deccan Herald

4. Congress leaders want "please all" Budget ‎ Economic Times - 2 hours ago NEW DELHI: Pitching for a virtual "please all" Budget 2012, Congress leaders in their wish-list asked Finance Minister Pranab Mukherjee to raise income tax ... Budget 2012: Exporters unlikely to get tax incentives‎ NDTV Income Tax: An investor's guide to Budget 2012: What one can expect‎Moneycontrol.com FM hopeful of meeting indirect tax target‎ Rediff mydigitalfc.com all 19 news articles »

   * Zee News

5. DoT can't work on defence spectrum: Kapil Sibal told Pranab Mukherjee ‎ Economic Times - 18 hours ago NEW DELHI: Communications Minister Kapil Sibal has told his counterpart in the finance ministry,Pranab Mukherjee, that the telecoms department (DoT) will ...

6. Pranab Mukherjee to skip G-20 Ministerial meeting in Mexico ‎ Times of India - 4 days ago NEW DELHI: Finance minister Pranab Mukherjee will skip the meeting of G-20 Ministers and governors of central banks in Mexico between February 24-26 as he ... + Video: NCTC row: Pranab steps in to quell opposition - NewsX NewsX Pranab Mukherjee holds parleys with regulators on budget‎ The Hindu Losing sleep over subsidy leakage, not subsidy itself: Pranab ...‎ NDTV Business Standard all 97 news articles »

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7. GoM skips discussion on model code of conduct ‎ Economic Times - 14 hours ago The GoM, headed by finance minister Pranab Mukherjee, approved the draft Public Procurement Bill, which seeks to regulate government purchase by installing ... GoM skips discussions on statutory backing to model code of conduct‎Expressindia.com DoPT note hints at govt plan to curtail EC powers‎ India Today Govt denies move to muzzle EC‎ Deccan Herald Firstpost - Daily Pioneer all 116 news articles »

   * IBNLive.com

8. ONGC divestment meet deferred to February 27 ‎ NDTV - 7 hours ago Earlier, the EGoM meeting headed by Finance Minister Pranab Mukherjee was scheduled for February 24. The EGoM is likely to decide on the timing of the issue... EGoM on ONGC disinvestment roadmap postponed to Feb 27‎ Moneycontrol.com all 8 news articles »

   * Moneycontrol.com

9. Spurring GDP growth to optimum level ‎ Hindu Business Line - 2 hours ago The Finance Minister, Mr Pranab Mukherjee, was hoping, as late as on February 7, for a 6.9 per cent GDP growth for India in 2011-2012, but the World Bank ...

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10. Pranab Mukherjee all praise for Mamata Banerjee ‎ Daily News & Analysis - 6 days ago Place: Bhagabanpur | Agency: PTI Amidst strains between the two allies, Pranab Mukherjee and Mamata Banerjee today shared a dais at a programme here where... Mamata complains to Pranab Mukherjee about acute financial crisis ...‎ Economic Times Pranab All Praise for Mamata‎ Outlook Pranab listens as Mamata says state coffers empty‎ Zee News MSN India - Indian Express all 237 news articles »

23 FEB, 2012, 03.32AM IST, HEMA RAMAKRISHNAN,ET BUREAU

Budget 2012 should create fiscal space to revive investments and spur growth

In 2003, former finance minister Jaswant Singh broke with convention, sprinkling tax proposals in his Budget speech that focused on 'Panch Priorites' of the National Democratic Alliance (NDA). Addressing lifetime concerns of people, infrastructure development, fiscal consolidation, enhancing farm productivity and raising efficiency in manufacturing were the goals. The economy grew by 8.5% in 2003-04, but the NDA was voted out of power in 2004.

P Chidambaram, who presented the Budget in 2004, went by convention. His Budget speech had two parts, with Part B covering tax proposals. His successor, finance minister Pranab Mukherjee, did not depart from convention either. But he could always pull out surprises, given that his boss Prime Minister Manmohan Singh set the tone for Budget 2012 in his message to the nation on the eve of new year.

Dr Singh listed out five key challenges - call them 'Panch Chunautiyan' - that would dominate the government's policy agenda this year. These are: livelihood security - education, food, health and employment - economic security, energy security, ecological security and national security. Some of the goals are similar to the ones scripted eight years ago. Hopefully, Mr Mukherjee will unveil reforms to address these challenges when he presents the Budget on March 16.

Food security is a laudable goal. However, it has to be accompanied with a sound strategy to raise farm output and efficiency across the board to contain the subsidy bill. Surely, the country needs a second green revolution to arrest the slowdown in agriculture and help rural incomes grow. Private trade must be allowed to procure, store and distribute grains as this would be far more efficient than relying solely on the Food Corporation of India. A proactive role for private trade coupled with cash transfers to the poor will lower costs and reduce leakages.

Similarly, a stable fisc is a critical element in ensuring economic security. According to Dr Singh, the government took a conscious decision to allow a larger fiscal deficit in 2009-10 to counter the economic slowdown, "That was the right policy at the time. We have run out of fiscal space and must once again begin the process of fiscal consolidation."

So, the government must bring its finances to a better shape. And that's a challenge as growth has slowed down, the global economic environment is uncertain and inflationary expectations continue to be high. Investments take a hit when government borrows money to sponsor consumption. The Budget must create more space for investments. This calls for slashing subsidies, starting with petroleum.

Diesel prices should be freed and competition allowed in retailing of petrofuels. The government should eliminate subsidy on kerosene, used mostly to adulterate other fuels, and instead spend the money on solar lamps for rural lighting. The subsidy on cooking gas should go too. The next priority is to phase out fertiliser subsidy. A pragmatic way would be to merge the fertiliser ministry with agriculture ministry that helps farmers with better prices.

"Some of the reforms needed for economic security attract controversy and cause nervousness. This is understandable, but we should learn from our past experience with reforms," the PM had said, without refering to foreign direct investment in organised retail. The reform will bring in new technologies for storage and transport, besides financial capital into the market. Here, there's nothing much that the Budget can do as the government first needs to convince its ally, the Trinamool Congress.

The government should also exit the stimulus, given to industry in 2008-09, in the form of cuts in excise duty and service tax. The tax rates should be restored to pre-crisis levels. However, as the PM has rightly said, the most important step to restoring fiscal stability is the goods and services tax (GST) that would modernise our indirect tax system, increase economic efficiency and raise revenues. The Opposition BJP should stop playing politics and come on board for GST.

Of course, the Budget can herald policy changes to enable smooth transition to GST. A small and well-defined negative list of services that would exempt from tax is in order for such a transition. Other pending tax reforms must be pursued as well.
http://economictimes.indiatimes.com/news/economy/policy/budget-2012-should-create-fiscal-space-to-revive-investments-and-spur-growth/articleshow/11998950.cms

18 FEB, 2012, 06.08PM IST, ASHISH GUPTA,TNN

Budget 2012: More tax benefits will push real estate sector up

The Union Budget for 2012-13 is around the corner. The Union Budget is scheduled to be tabled on March 16. The realty sector is hoping for something in the Budget that will stimulate more demand. According to industry watchers, the limits and exemptions should be harmonised with the rising interest rates and property prices. The realty industry is also expecting some reforms in the coming Budget.

Presently, the limit for deduction on interest paid on a home loan is Rs 1.5 lakhs from your taxable income. You get an exemption on repayment of the principle amount under Section 80C. The limit for this deduction is Rs 1 lakh. In order to stimulate housing sector credit, it is reported the government is contemplating enhancing the income tax exemption limit to Rs 3 lakhs against interest paid on housing loans.

Another demand is that the principal repayment be treated as a separate tax exemption entity and excluded from benefits under Section 80C.

In the 2011-12 Budget, the government had provided a one percent interest subsidy for affordable housing. The realty sector hopes the scope of this rebate is extended to include a wider price band of budget housing. It could be raised from the present Rs 20 lakhs to Rs 40 lakhs due to the increase in costs of raw materials and various taxes incurred by homebuyers.

The property industry feels affordable housing should be considered as priority lending. Banks could offer concessional rates to keep the cost within the reach of buyers. This will bring down the housing shortage in the country.

Builders are hoping for an extension of the existing benefit under Section 80IB(10) of the Income Tax Act for developing affordable housing.
http://economictimes.indiatimes.com/markets/real-estate/realty-trends/Budget-2012-More-tax-benefits-will-push-real-estate-sector-up/articleshow/11939960.cms

Check out: Sectoral wishlist for Budget 2012 Source: IRIS (23-FEB-12)

``The Union Budget of 2012-13 will be conducted at a time when the economy is in the midst of an economic downturn and upside risks of further contagion from the slowdown in the developed economies remain high. This time around expectations from the government to dole out ambitious or big-budget announcements are few as Government finances remain crippled with the target for fiscal deficit for FY12 is expected to be breached by over a percentage point. Lower revenue generation during FY12 owing to the slowdown in the growth momentum and inflated subsidy bill would continue to pose challenges for the government for the ensuing year as well. The government in this budget is thus expected to focus strongly on fiscal consolidation. Moreover, expectations for a reform-oriented budget from the government to help the economy to gather momentum are very high,`` said  Arun Singh, Senior Economist, Dun & Bradstreet India. Following are the sectoral budget wish-list/expectations   Infrastructure Infrastructure Financing > Rationalization of Dividend Distribution Tax to remove its cascading effect and make investment in infrastructure sector more attractive. > Exempting infrastructure companies and SEZ units from MAT provisions. > Reintroduction of section 10 (23G) of Income Tax Act, which provided tax exemption of interest and long term capital gainsin the hands of Infrastructure capital companies. This will reduce cost of borrowings for infrastructure companies. > Exemption of interest earned by foreign lenders on overseas loans availed by Indian borrowers in all cases similar to earlier provisions under section 10(15) (f). > Permit Banks to issue long term tax free infrastructure bonds and enhance the participation of banks, financial institutions and large NBFCs in infrastructure financing. > Concrete steps towards creation of a deep and robust debt capital market to make available long term debt instruments for infrastructure. > Bring reforms to insurance and pension sector to tap these sectors for infrastructure financing. > Further implementation of Deepak-Parekh Committee report to create a long term debt fund for infrastructure sector. Others > Setting up of Expressway Authority of India as envisaged in the Eleventh Plan document. > Encouragement to Private sector to build storage facilities for agriculture goods by providing fiscal incentives. > Concrete steps to promote greater investments in agriculture infrastructure viz. cold storage, warehouses & Irrigation. > Extension of weighted deduction for R&D to investments by private sector in agriculture infrastructure and also to services provided to farmers. > Privatization of coal mines and stimulating overall demand through fiscal measures. > Grant infrastructure status to aviation, telecom, healthcare and education sector. > Grant `Declared Goods` Status to Aviation Turbine Fuel (ATF). Oil & Gas Sector > 10-Year Tax Holiday for Oil & Gas Companies. > Elimination of Customs Duty on Liquefied Natural Gas (LNG) with an aim to lower the cost of imported fuel for the core sectors of fertilizer and power plants. > Declaring ``Goods Status`` to Natural Gas & LNG. > Inclusion of crude oil and petroleum products under the recommended Goods and Service Tax (GST) regime. The inclusion of petroleum products under GST will eliminate twisted wires of taxes paid by suppliers as well as by the industry at different stages in the petroleum value chain. Further, it will also enable the States and the Centre to capture full revenue potential up to sale to final consumers. Power Sector > Disinvestment of power generation, distribution and transmission PSU companies. > Exemption of basic customs duty and countervailing duty implemented on thermal or steam coal. Further reduction of customs duty from the imported coal is important as it discourages power projects based on imported coal. > Natural Gas should be included in the list of Goods of special importance under Section 14 of the Central Sales Tax Act for uniform taxation across the country. Moreover, with an aim towards a greener environment, natural gas should be given preference over crude oil. > Extension of the eligibility norms of tax holiday incentives for power generation companies from starting their power generation before Apr.01, 2011 to another five years. > Re-establish tax exemptions of income from investment in power generation projects. One more way is the tax exemption on the interest earned by foreign lenders on overseas loans availed by Indian borrowers as was the position earlier under section 10(15) (f). Metals and Mining Sector > Removal of 2.5% import duty on iron ore lumps, fines and pellets. > Government should abolish or reduce the export duty on iron ore fines in order to increase the profit margins of miners. > Providing subsidy for importing raw materials and providing tax incentives for managing them locally. > Providing additional incentives to the Iron ore producers to add value to the mineral and pelletisation so as to encourage its conservation for domestic use. > Adequate steps to privatize coal mines to reduce the coal shortage in the country. > Allowing exploration of deep-seated minerals on a first-come-first-served basis rather than by auction so that the sector looks attractive for private players and the approach is expected to increase investments into exploration and mining for minerals like copper, gold, diamond, nickel, etc. MSMEs > Lower interest rate for MSMEs. > To announce tax breaks based on the ratio between employment and capital invested. > Income tax exemption on profits ploughed into the business. BFSI Sector > Removal of the Securities Transaction Tax (STT) on equity trades for the upcoming Union Budget is priority. Abolition of STT will revive intra-day trading, reduce transaction cost, promote equity culture and retail participation and engender healthy speculative activity required for the functioning of the market and revival of sentiments. > Lock-in period for fixed deposits of up to Rs 1 lakh that are eligible for tax deductions under Section 80C of the Income Tax Act is to be brought down to three years from the current five years to bring it on par with a similar deduction available for equity linked savings products where lock-in is only three years. > Microfinance bill to be proposed in budget session. > Emphasis on the financial strengthening of Public Sector Banks (PSBs). PSBs like SBI likely to get capital infusion which is expected to bring more stability. Capital and Engineering Goods > Import duty from the current 5.0% may be hiked on power generation equipment for projects above 1,000 MW capacity by levying additional duty of 5.0% and countervailing duty of 4.0% making it a total of 14.0% to ensure level playing field in providing cushion to domestic manufacturers against cheaper imports from China. > Entry Tax on material handling equipment is likely to be exempted. > Motor vehicles, dumpers & tippers are eligible capital goods under CENVAT credit scheme only for a few service providers. Manufacturers are not entitled to avail CENVAT credit of duty paid on such capital goods. The duty on such capital goods may also be allowed as CENVAT Credit to manufacturer where these capital goods are utilized for the purposes of manufacturing. > Current CENVAT credit of 50% on capital goods in the year of receipt to be increased to 100%. > Countervailing duty of 5.0% may be levied on the import of goods on which 1.0% duty is imposed under central excise. > Mandatory exemption of central sales tax from the current 2.0% and VAT from the current 5.0% -14.5% for domestic supplies of power equipment`s to mega/ultra-mega power projects or exemption of such levies for evaluation of bids is expected. 7. Duty exemption is expected in the import of Cold Rolled Grain Oriented electrical steel which is not manufactured in the domestic market and is a critical raw material in manufacturing of transformers. Healthcare Sector > The income tax clause of 100% deduction on profits derived from the business in initial five years needs to include the currently excluded companies. > Moreover, the tax exemption clause should be extended to ten years or grant an option to the hospitals to select five consecutive years from initial 10 years of commencement. > To boost innovation, investment in healthcare research, by way of deductions from profit linked to investment or research tax credit is needed. > Percentage of weighted deduction on contributions made to an exclusive research and development should be increased from 125% to 175%. > Medicines, bulk drugs, medical equipment and implants are essential to provide healthcare facilities. It is expected to be either exempted or kept under a lower tax rate under the proposed GST regime. Pharmaceutical Sector > To promote research and development in the pharmaceutical sector,  deduction from profits linked to investments to R & D is needed. > To provide clarity on deductions on R&D expenditure for companies where manufacturing activity is partly or entirely outsourced, specific provision for such companies is needed. > Excise duty on Active Pharmaceutical Ingredients (API`s) needs to be lowered from 10.0% to 5.0% so as to be on par with other pharmaceutical goods. Moreover, abatements expected to be increased from 35.0% to 45.0% to cover the trade margins of pharmaceutical companies. > All lifesaving drugs need to be exempted from Goods and Service Tax (GST). > The existing inverted duty structure in the pharmaceutical industry has resulted to accumulation of CENVAT credit. Lowering the excise duty structure for raw materials or providing a refund mechanism for the accumulated CENVAT credit to reduce tax liability will be beneficial for pharmaceutical companies. > Advanced pricing agreement mechanism which can minimize the tax litigation on issues related to import prices of API`s is needed.   Telecom Sector > To provide infrastructure status to the telecom sector and subsequent tax benefits related to infrastructure. > To provide incentives for expanding into remote regions in the form of tax holidays or subsidies. > Rationalisation of levies and duties for mobile companies including a uniform annual revenue share of 6-8%. > Abolition of service tax on internet and broadband services is expected. > CENVAT credit for telecom towers is expected. > Tax rebates and exemptions (customs duty, excise duty and VAT on any inputs) for companies which set up R&D facilities are expected. > Subsidy on capital investment for setting up the R&D facility is likely. Automobiles > The Government is considering raising the excise duty on diesel cars. If implemented, it would increase the prices of diesel cars, thereby affecting demand. Leather > Implementation of 2.0% interest subvention on rupee export credit. > In the wake of rupee losing value against other major currency which has been making the raw material import costlier, an increase in rate of Duty Free Import Scheme to 5.0% from the prevailing 3.0% is expected.   > Exemption of service tax on the leather tanning operations and common effluent treatment plants. > Exemption of excise duty on footwear and reduction in the rate of excise duty on other leather products from prevailing 10.0% to 5.0% is expected. > Clarification on independent foreign agents who are only engaged in securing export orders to be excluded from the tax deduction at source. > Financial Support of Rs 900 million towards creation of social infrastructure facilities like hostels and dormitories for women employees involved in leather manufacturing industry is proposed. > Establishment of sector skill council to train workers and develop a curriculum for 50 shop floor operations. Real Estate & Construction > Uniform tax regime or rationalized tax structures to resolve dispute and litigations arising from transactions taxability. > Home loan tax bar to be doubled to Rs 300,000 from Rs. 150,000. > Expectation on subvention in interest rates for existing home loans, and to new housing loans. > Promotion on rental housing, and lowering the tax rate on rental income from 30% to 20%, along with taxing only 50% of the rental income as compared to the current 70%. Also, income tax exception from rental income (under Section 24) should be increased from the current 30% to 50%. IT/ITes Sector > MAT (Minimum Alternate Tax) rate should be kept stable. > Special incentives for Small & Medium Businesses. > Revival of tax benefits under the Software Technology Parks of India (STPI) scheme. > Increased IT adoption by Government.   > Measures to boost STPs/SEZs projects in Tier-II and Tier-III cities. > Further strengthening of legal framework for protection of Intellectual Property Rights (IPR) and data security. > Inadequate infrastructure facilities in terms of transportation, connectivity, power and communication facilities have increased the cost of doing business in India. This is forcing IT firms in India to explore other low cost destinations such as Philippines. Thus, in order to sustain the long-term growth of the IT/ITes industry, it is imperative for the Government to take measures to increase the infrastructure investments.       Gems & Jewellery > MAT rate should be held steady. > The import duty on gold and silver to be kept stable. > Increase cost of trading to foreign bullion players. > Capital gains exemptions for investment in jewellery. > Initiatives for enhancing skills of artisans. > No further increase in excise duty on branded jewellery. > Offer low cost capital funding to jewelers. Cement > The tax structure is expected to be revisited. > To grant ``declared goods`` status for the industry in order to bring a uniform tariff structure across the country. This will also lower the tax burden on these companies. > Some incentive towards the Ready Mix Concrete (RMC) business will lead to bulk supply of cement and consequent reduction in packaging cost. > Tax incentive to be provided for promoting blended cement in the larger interest of mineral conservation, waste utilization and bringing down carbon emission. > Since cement industry is directly impacted by the fortunes on the infrastructure sector, the further thrust on infrastructure investment in the country is widely expected. Retail Sector > Opening of FDI in non-food multi-brand. > Tax holidays/Fiscal Incentives for retailers willing to spend in rural areas. > Rs 750 million budget for promotion of gems and jewellery of the retail trade and exemption for the application of the Lottery Act for ONE national shopping festival yearly across India. > Reduction in Minimum Alternate Tax (MAT) Rate to 15.0% from 18.5%. > Formulation of a Retail Policy. > Establish Public Refrigerated Warehouse Complexes (PRWs) in Backward Districts. > Allocate significant resources for Mobile refrigerated vans. > To enable the retail sector provide employment to a large mass of local population, simplified labor laws for flexibility in operations is expected. > Permission to operate 24x7. > Consumer Affairs - Weights & Measures Act. > Retail and Entertainment Zones (REZ). > In order to augment the living standards of people in the city, initiatives to create Retail and Entertainment Zones (REZ) similar to SEZ and IT parks is expected. Retailers in REZ to get benefits like exemption from stamp duty, Octroi, and cheaper power. > VAT Refund for making India attractive for shopping tourism. > Consumption Incentive: Providing a consumption incentive in the form of personal income tax relief to consumers, who can spend say up to 25% of their income on consumer goods and services, which can be supported by tax invoices from the retailer/establishment. Textile & Garments Sector > Roll back of 10% excise duty on branded garments. > To promote seed research for cotton, seed companies should be given a status of infrastructure companies and income of seed companies should be treated as agriculture income. Finance extended to seed companies should be treated as priority sector lending in the banks. > Price deregulation, particularly in cotton is essential. > Right to equality to Small Scale Sector. Tourism & Hospitality Industry > As inbound tour operators attract and offer their services to foreign tourists in India, service tax exemption is expected on tour operator`s foreign exchange earnings. > Increase service tax abatement to 90% for Domestic tour operators. > To improve tourism industry in India, Section 80HHD can be revived. Under this act, tour operators and travel agents should be allowed to transfer part of their profit to tourism development reserves for investment in tourism related projects. > Export industry status to Tourism Industry. > Domestic Airfares- Taxes on ATF is expected to be revisited. > Uniform State Luxury tax at 5%. >  Uniform all state transport taxes. > Infrastructure status for Hotels and convention centers. Consumer Goods > Restructuring of the income tax slab is expected in line with the Direct Taxes Code Bill. This will increase the disposable income in the hands of consumers thereby impacting the consumer goods sector positively. > The standard excise duty at 10% is expected to be maintained in the Budget. > Introduction of GST should be given high priority in order to make Indian industry competitive. > Levying of safeguard duty and anti-dumping duty in appropriate cases especially in the case of import from China. Media & Entertainment Industry > Clarification is sought in the budget explaining whether tax on carriage fees/placement charges and up-linking charges paid by television channel should be deducted at 2.0% treating such payments as consideration for work or at 10.0% considering it as payment towards technical services/use of process, etc. > Payments made on sale of satellite rights of loss making films to television channels are subject to TDS as they are treated as ``royalty`` for use of copyright. This is causing hardship to companies and thus such payments are expected to be exempted from TDS. > It is expected that expenditure by foreign broadcasters on acquiring telecasting rights in films/programmes either on an outright basis or on license for specified period should be allowed as a deduction in the year of first telecast or deferred over the period of license rather than capitalizing it for claiming depreciation. > A clarification to the effect that the payment for grant of distribution rights is not for the `copyright` in the content and hence, do not qualify as `Royalty` is sought for in the Budget. Service tax is applicable on the temporary transfer or permitting the use of Copyright in relation to the cinematographic films. However, under the state specific Value Added Tax (VAT) laws, transfer of right to use of the Copyright is already subject to the VAT. This dual taxation should be avoided by implementing GST. 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Palash Biswas
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