Union Budget 2009-10 – Key Highlights – Taxes

Tax Reforms

• Saral Form II to be reintroduced.
• In 4 years, filing tax returns online to be made easier.

Personal Tax

• Personal income tax exemption limit raised by Rs 10,000.
• 10 per cent surcharge on personal income tax removed. This was charged for individuals whose income in more than Rs. 10 lakhs. (This would help them save Rs 1,000 on every Rs 1 lakh additional income )
• Income Tax rates exemption limit to be raised from Rs 180,000 to 190,000 for women and from Rs. 2, 25,000 to 2, 40,000 for senior citizens.
• Threshold limit for wealth tax has been increased from Rs 15,00,000 to Rs 30,00,000.

Companies Tax

• Fringe benefit tax is abolished. It was introduced in 2005.
  

(This means that the perks that were earlier taxed in the employer hands will now be taxed in the employee's hands. So its not good news for the employees. )

• Commodities Transaction Tax abolished!
• Securities transaction tax is cut
• MAT (minimum alternative tax) rate to be increased to 15% versus 10% of book profit
• Small businesses up to Rs 40 lakh (Rs 4 million0 turnover exempted from filing advance tax returns.

Other Taxes

• Service tax exempted for exporters on select services.
• Service Tax to be extended to lawyers on technical advice.

Duties

• Customs duty on LCD panels halved from 10% to 5%.
• Customs duty of 5 per cent being levied on import of set-top boxes used under Conditional Access System (CAS).
• Customs Duty to be reduced on drugs for heart treatment.
• Excise duty on fibre for cheaper cloth reduced.
• Excise duty on petrol-driven small trucks reduced to 10 per cent.
• Full exemption from excise duty on branded jewellery.

(Makes LCD TV, heart disease related drugs, SUVs, trucks, branded jewellery cheaper.)