Budget

Highlights

The following are the taxation highlights of Union Budget for 1997-98 presented to Parliament today by Finance Minister P. Chidamabaram:

Income tax rates on all slabs reduced from 15, 30 and 40 per cent to 10, 20 and 30 per cent, respectively.

Standard deduction raised to Rs 20,000, enabling tax free income up to Rs 75,000 per year. Income tax exemption for senior citizens up to Rs 1 lakh

Tax net widened to include urban rich on criteria like ownership of four-wheeler, telephones, immovable property and foreign travel in previous year.

Voluntary disclosure scheme to bring in black money for productive use.

Surharge on corporate tax abolished.

Minimum alternate tax (MAT) continues with carry forward system; export profits exempted.

Tax rates for domestic and foreign companies reduced.

Tax on dividend income abolished

Peak rates of Customs duty reduced to 40 per cent from 50 per cent; customs on baggage down from 60 to 50 per cent.

Customs duty on capital and inputs for steel reduced; duty reduction for textile industry

Computer, television, telecom equipment,cellular phone to be cheaper.

Cigarettes and bidis to be costlier.

Excise rates rationalised; intention to move towards mean rate of 18 per cent.

Service tax extended to goods transportation by road.

Man consumption items of toiletery, beverages like cocoa and coffee and watches to be cheaper.

Post cards, Inland letters, envelopes to cost more.

Excise duty concessions for small scale sector simplified.

Innovative schemes to tap resources for infrastructure financing; oil exploration industrial parks to be treated as infrastructure.

Full customs duty exemption to computer software.

Duty on telecom equipment reduced from 40 to 30 per cent and on parts from 30 to 20 per cent.

Customs on compressed natural gas (CNG) kits and parts to be halved at 5 per cent; catalytic converters and parts to attract only 5 per cent duty against 25 per cent now.

Duty on medical equipment slashed to 20 per cent; on homoeopathic drugs duty cut from 25 per cent to 20 per cent.

Import duty on specified speciality food items used by foreign tourists to be halved at 25 per cent; specified equipment for hotel industry reduced to 25 per cent.

Oil exploration and industrial parks included in the infrastructure sector.

Assignability of telecom licence issue resolved. Tripartite agreements proposed to be entered into among DoT, Licencee and lenders.

Budgetary support to the National Highways Authority of India enhanced to Rs. 500 crore.

Proposal for service tax on transportation of goods by road for development of national highways.

Supply of goods to oil gas and power projects made under intenational competitive bidding to be given the benefits of deemed exports.

Ra 2500 crore rural infrastructure development fund III to be launched during the financial year.

Tax holiday for infrastructure projects to continue.

Deduction of 50 per cent of profit of new hotels in hilly areas, places of pilgrimage or a specified place of tourist importance.

Reduction of duty on non-coking coal from 20 per cent to 10 per cent to benefit power sector.

Duty on cine films and other photographic films cut to 25 per cent; parts of camera to attract 25 per cent duty.

Concessional 10 per cent duty on imports of components and parts of textile machinery

Customs duty on dyes, pigments, paints and varnishes cut to 30 per cent.