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Highlights: Budget 2004-05
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8
08 July 2004 |
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- Two per cent education cess imposed on income tax, corporation tax, excise duties, customs duties and service tax.
- Service tax rate hiked from eight per cent to ten per cent, tax net to include a host of services.
- Persons with taxable income of Rs1 lakh will not have to pay income tax, tax slabs and rates unchanged for others.
- No change in interest rates on small savings including PPF, GPF and special deposit scheme.
- Sectoral cap for FDI to be raised from 49 per cent to 74 per cent in telecommunuications; from 40 per cent to 49 per cent in civil aviation and from 26 per cent to 49 per cent in insurance.
- Investment ceiling for FIIs in debt funds to be raised from US$1 billion to US$1.75 billion.
- Equity oriented mutual funds will continue to be exempt from tax on dividends.
- Banks with strong risk management systems to be allowed greater latitude in their exposure to capital market.
- Investment commission to be established.
- 85 items to be taken out of the reserve list for small scale sector.
- Automobile industry will be entitled to 150 per cent deduction of expenditure on in-house R&D facilities.
- Request of shipping industry for the levy of tonnage tax accepted.
- New hospitals with 100 beds or more set up in rural areas to get tax benefit.
- Long-term capital gains from securities transactions to be replaced by a tax on transactions; short term capital gains tax slashed to 10 per cent.
- Tractors, dairy machinery and hand tools such as spades to be fully exempt from excise.
- Preparation of meat, poultry and fish to attract 8 per cent excise, down from 16 per cent earlier.
- Computers to be fully exempted from excise duty; LPG gas stoves costing less than Rs2,000 and footwear upto Rs250 to get excise relief.
- Task force to be appointed on reforms in the cooperative banking system.
- Rs2,800 crore provided for accelerated irrigation benefit programme.
- Special economic package of Rs3,225 crore for Bihar through the Rashtriya Sam Vikas Yojana.
- North-eastern region gets Rs650 crore from the central pool for specific projects and schemes.
- Jammu and Kashmir to get special assistance for a reasonable plan size, Baglihar project and to switch over to RBI's ways and means advance.
- Additional provision of Rs10,000 crore for programmes such as Food for Work, Sarva Shiksha Abhiyan, basic health care, drinking water etc.
- Antyodaya Anna Yojana to be extended to 2 crore families.
- Pilot scheme for distributing food stamps to be introduced.
- Defence budget hiked from Rs65,300 crore to Rs77,000 crore.
- States' share of union taxes to increase by about 30 per cent, from Rs63,758 crore to Rs82,227 crore.
- States to pay 9 per cent interest on government of India loans as against the previous 10.5 per cent.
- Plan expenditure hiked to Rs1,45,590 crore, up from Rs1,21,507 crore in the revised estimate for 2003-04.
- Direct taxes to yield Rs2,000 crore more, indirect tax changes to stay revenue neutral.
- Fiscal deficit pegged at 4.4 per cent, down from 4.8 per cent in 2003-04 revised estimates.
- Revenue deficit to be eliminated by 2008-09.
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