Key announcements relating to insurance Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into service tax net.
Following Bills will be amended in current session of Parliament
- The Insurance Laws (Amendment) Bill, 2008;
- The Life Insurance Corporation (Amendment) Bill, 2009;
- The revised Pension Fund Regulatory and Development Authority Bill, first introduced in 2005
No extra exemptions provided to life insurance companies.
Limit of Exemptions under Section 80C remains unchanged
No announcement of increase in FDI in Insurance sector
DTC to be finalised in the year 2011
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Key Features of Budget 2011-2012
TAX PROPOSALS
Direct Taxes
Exemption limit for the general category of individual taxpayers enhanced from Rs. 1,60,000 to Rs.1,80,000 giving uniform tax relief of Rs.2,000.
Exemption limit enhanced and qualifying age reduced for senior citizens.
Higher exemption limit for Very Senior Citizens, who are 80 years or above.
Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.
Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to 18.5 per cent of book profits.
Tax incentives extended to attract foreign funds for financing of infrastructure.
Additional deduction of Rs. 20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year.
Lower rate of 15 per cent tax on dividends received by an Indian company from its foreign subsidiary.
Benefit of investment linked deduction extended to businesses engaged in the production of fertilisers.
Investment linked deduction to businesses developing affordable housing.
Weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to be enhanced to 200 per cent.
System of collection of information from foreign tax jurisdictions to be strengthened.
A net revenue loss of Rs.11,500 crore estimated as a result of proposals.
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Indirect Taxes
To stay on course for transition to GST.
Central Excise Duty to be maintained at standard rate of 10 per cent.
Reduction in number of exemptions in Central Excise rate structure.
Nominal Central Excise Duty of 1 per cent imposed on 130 items entering in the tax net.
Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.
Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 per cent.
Peak rate of Custom Duty held at its current level.
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