Key Features of Budget 2011-2012 (Income Tax & Service Tax)

1. Service tax raised on air travel.rn2. Legal services to be expanded to business entities.rn3. No new tax exemption limit for women. rn4. Service tax unchanged at 10 per cent.rn5. Tax Exemption limit raised from Rs1.6 lakh to Rs 1.8 lakh.rn6. Surcharge reduced on corporate tax to 5%.rn7. Exemption limit for general tax payers raised to Rs 1,80,000.rn8. New category for 80 yrs and above, limit is Rs 5 lakh.rn9. Relaxation in e-filing norms for small tax payers.rn10. 1% interest subvention on home loans upto 15 lakhrn11. Home Loan Limit Hiked to 25 lakh for priority sector lending.rn12. New scheme to be introduced for refund of service tax.rn13. New Companies Bill to be introduced in current session. Direct Taxes Code (DTC) to be finalised for enactment during 2011-12. DTC proposed to be effective from April 1, 2012.rnAreas of divergence with States on proposed Goods and Services Tax (GST) have been narrowed. As a step towards roll out of GST, Constitution Amendmentrn• 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. •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. •Central Excise Duty to be maintained at standard rate of 10 per cent. •Reduction in number of exemptions in Central Excise rate structure. • Standard rate of Service Tax retained at 10 per cent, while seeking a closer fit between present regime and its GST successor. • Hotel accommodation in excess of Rs 1,000 per day and service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax. •Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning. •Service Tax on air travel both domestic and international raised. •Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net. •All individual and sole proprietor tax payers with a turn over upto Rs 60 lakh freed from the formalities of audit.