http://exim.indiamart.com/budget-2010-11/highlights-budget-2010-11.html CHAPTER III DIRECT TAXES Income-tax 3.

In section 2 of the Income-tax Act, (a) in clause (15), after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2009, namely: Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is ten lakh rupees or less in the previous year;; (b) in clause (24), in sub-clause (xv), after the words, brackets and figures value of property referred to in clause (vii), the words, brackets, figures and letter or clause (viia) shall be inserted with effect from the 1st day of June, 2010. 4. In section 9 of the Income-tax Act, for the Explanation occurring after subsection (2), the following Explanation shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 1976, namely: Explanation.For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) and shall be included in the total income of the nonresident, whether or not, (i) the non-resident has a residence or place of business or business connection in India; or (ii) the non-resident has rendered services in India.. 5. In section 10 of the Income-tax Act, in clause (21), with effect from the 1st day of April, 2011,

(a) for the words scientific research association, wherever they occur, the words research association shall be substituted; (b) in the opening portion, after the word, brackets and figures clause (ii), the words, brackets and figures or clause (iii) shall be inserted; (c) in the first proviso, in clause (a), (A) in sub-clause (i), (I) in item (2), for the words scientific research, the words scientific research or research in social science or statistical research shall be substituted; (II) in item (3), after the word, brackets and figures clause (ii), the words, brackets and figures or clause (iii) shall be inserted; (B) in sub-clause (ii), for the words scientific research, the words scientific research or research in social science or statistical research shall be substituted. Amendment of section 2. Amendment of section 9. Amendment of section 10. 5 10 15 20 25 30 35

40 45 505 http://indiabudget.nic.in 6. In section 10AA of the Income-tax Act, in sub-section (7), the following proviso shall be inserted, namely: Provided that the provisions of this sub-section [as amended by section 6 of the Finance (No. 2) Act, 2009] shall have effect for the assessment year beginning on the 1st day of April, 2006 and subsequent assessment years.. 7. In section 12AA of the Income-tax Act, in sub-section (3), after the word, brackets and figure subsection (1), the words, figures letter and brackets or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996] shall be inserted with effect from the 1st day of June, 2010. 8. In section 32 of the Income-tax Act, in sub-section (1), in the fifth proviso, for the words, brackets and figures clause (xiii) and clause (xiv), the words, brackets, figures and letter clause (xiii), clause (xiiib) and clause (xiv) shall be substituted with effect from the 1st day of April, 2011. 9. In section 35 of the Income-tax Act, with effect from the 1st day of April, 2011, (i) in sub-section (1), (a) for the words scientific research association, wherever they occur, the words research association shall be substituted; (b) in clause (ii), for the words one and one-fourth, the words one and threefourth shall be substituted;

(c) in clause (iii), (A) for the words any sum paid to a university, the words any sum paid to a research association which has as its object the undertaking of research in social science or statistical research or to a university shall be substituted; (B) in the proviso, for the words such university, at both the places where they occur, the words such association, university shall be substituted; (ii) in sub-section (2AA), in clause (a), for the words one and one-fourth, the words one and three-fourth shall be substituted; (iii) in sub-section (2AB), in clause (1), for the words one and one-half, the word two shall be substituted. 10. In section 35AD of the Income-tax Act, (a) in sub-section (2), in clause (iii), in sub-clause (c), for the words one-third of its total pipeline capacity, the words, brackets and figures such proportion of its total pipeline capacity as specified by regulations made by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 shall be substituted; (b) for sub-section (3), the following sub-section shall be substituted with effect from the 1st day of April, 2011, namely: (3) Where a deduction under this section is claimed and allowed in respect of the specified business for any assessment year, no deduction shall be allowed under the provisions of Chapter

VI-A under the heading C.Deductions in respect of certain incomes in relation to such specified business for the same or any other assessment year.; (c) in sub-section (5), with effect from the 1st day of April, 2011, (i) in clause (a), the word and, occurring at the end, shall be omitted; (ii) after clause (a), the following clause shall be inserted, namely: (aa) on or after the 1st day of April, 2010, where the specified business is in the nature of building and operating a new hotel of two-star or above category as classified by the Central Government; and; (iii) in clause (b), for the word, brackets and letter clause (a), the words, brackets and letters clause (a) and clause (aa) shall be substituted; (d) in sub-section (8), in clause (c), after sub-clause (iii), the following sub-clause shall be inserted with effect from the 1st day of April, 2011, namely: (iv) building and operating, anywhere in India, a new hotel of two-star or above category as classified by the Central Government;. Amen 19 of 2006. Amendment of section 10AA. 33 of 2009. Amendment of section 12AA. Amendment of section 32. Amendment of section 35.

Amendment of section 35AD. 33 of 1996. 5 10 15 20 25 30 35 40 45 506 http://indiabudget.nic.in 11. In section 35DDA of the Income-tax Act, with effect from the 1st day of April, 2011, (a) after sub-section (4), the following sub-section shall be inserted, namely: (4A) Where there has been reorganisation of business, whereby a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso to clause (xiiib) of section 47, the provisions of this section shall, as far as may be, apply to the successor limited liability partnership, as they would have applied to the said company, if reorganisation of business had not taken place.; (b) in sub-section (5), for the words, brackets and figures sub-section (3) and in the case of a firm or proprietary concern referred to in sub-section (4), the words, brackets, figures and letter subsection (3), in the case of a firm or proprietary concern referred to in sub-section (4) and in the case

of a company referred to in sub-section (4A) shall be substituted. 12. In section 40 of the Income-tax Act, in clause (a), in sub-clause (ia), (a) for the portion beginning with the words has not been paid, and ending with the words the last day of the previous year, the words, brackets and figures has not been paid on or before the due date specified in sub-section (1) of section 139 shall be substituted; (b) for the proviso, the following proviso shall be substituted, namely: Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in subsection (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.. 13. In section 43 of the Income-tax Act, with effect from the 1st day of April, 2011, (a) in clause (1), in Explanation 13, in clause (b), in sub-clause (iii), for the brackets, figures and word (xiii) and (xiv), the brackets, figures, letter and word (xiii), (xiiib) and (xiv) shall be substituted; (b) in clause (6), after Explanation 2B, the following Explanation shall be inserted, namely: Explanation 2C.Where in any previous year, any block of assets is transferred by a private company or unlisted public company to a limited liability partnership and the conditions specified in the proviso to clause (xiiib) of section 47 are satisfied, then, notwithstanding anything contained in clause (1), the actual cost of the block of assets in the case of the limited liability partnership shall be the written down value of the block of assets as in the case of the said company on the date of conversion of the company into the limited liability partnership..

14. In section 44AB of the Income-tax Act, with effect from the 1st day of April, 2011, (a) in clause (a), for the words forty lakh rupees, the words sixty lakh rupees shall be substituted; (b) in clause (b), for the words ten lakh rupees, the words fifteen lakh rupees shall be substituted. 15. In section 44AD of the Income-tax Act [as amended by section 20 of the Finance (No. 2) Act, 2009], in the Explanation, in clause (b), in sub-clause (ii), for the words forty lakh rupees, the words sixty lakh rupees shall be substituted with effect from the 1st day of April, 2011. 16. In section 44BB of the Income-tax Act, in the proviso to sub-section (1), after the words, figures and letter section 44D or, the words, figures and letters section 44DA or shall be inserted with effect from the 1st day of April, 2011. 17. In section 44DA of the Income-tax Act, in sub-section (1), after the proviso, the following proviso shall be inserted with effect from the 1st day of April, 2011, namely: Provided further that the provisions of section 44BB shall not apply in respect of the income referred to in this section.. 18. In section 47 of the Income-tax Act, after clause (xiiia), the following shall be inserted with effect from the 1st day of April, 2011, namely: (xiiib) any transfer of a capital asset or intangible asset by a private company or unlisted public company (hereafter in this clause referred to as the company) to a limited liability partnership as a result of conversion of the company into a limited liability partnership in accordance with the provisions of section 56 or section 57 of the Limited Liability Partnership Act, 2008: Provided that

(a) all the assets and liabilities of the company immediately before the conversion become the assets and liabilities of the limited liability partnership; 33 of 2009. Amendment of section 40. Amendment of section 43. Amendment of section 35DDA. Amendment of section 44AB. Amendment of section 44AD. Amendment of section 44BB. Amendment of section 44DA. Amendment of section 47. 6 of 2009. 5 10 15

20 25 30 35 40 45 507 http://indiabudget.nic.in (b) all the shareholders of the company immediately before the conversion become the partners of the limited liability partnership and their capital contribution and profit sharing ratio in the limited liability partnership are in the same proportion as their shareholding in the company on the date of conversion; (c) the shareholders of the company do not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of share in profit and capital contribution in the limited liability partnership; (d) the aggregate of the profit sharing ratio of the shareholders of the company in the limited liability partnership shall not be less than fifty per cent. at any time during the period of five years from the date of conversion; (e) the total sales, turnover or gross receipts in business of the company in any of the three previous years preceding the previous year in which the conversion takes place does not exceed sixty lakh rupees; and (f) no amount is paid, either directly or indirectly, to any partner out of balance of accumulated

profit standing in the accounts of the company on the date of conversion for a period of three years from the date of conversion. Explanation.For the purposes of this clause, the expressions private company and unlisted public company shall have the meanings respectively assigned to them in the Limited Liability Partnership Act, 2008;. 19. In section 47A of the Income-tax Act, after sub-section (3), the following subsection shall be inserted with effect from the 1st day of April, 2011, namely: (4) Where any of the conditions laid down in the proviso to clause (xiiib) of section 47 are not complied with, the amount of profits or gains arising from the transfer of such capital asset or intangible asset not charged under section 45 by virtue of conditions laid down in the said proviso shall be deemed to be the profits and gains chargeable to tax of the successor limited liability partnership for the previous year in which the requirements of the said proviso are not complied with.. 20. In section 49 of the Income-tax Act, (a) in sub-section (1), in clause (iii), in sub-clause (e), for the words, brackets, figures and letters clause (vicb) of section 47, the words, brackets, figures and letters clause (vicb) or clause (xiiib) of section 47 shall be substituted with effect from the 1st day of April, 2011; (b) in sub-section (4), after the word, brackets and figures clause (vii), at both the places where they occur, the words, brackets, figures and letter or clause (viia) shall be inserted with effect from the 1st day of June, 2010. 21. In section 56 of the Income-tax Act, in sub-section (2),

(a) in clause (vii), (i) for sub-clause (b), the following sub-clause shall be substituted and shall be deemed to have been substituted with effect from the 1st day of October, 2009, namely: (b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;; (ii) in the Explanation, in clause (d), (A) in the opening portion, for the word means, the words means the following capital asset of the assessee, namely: shall be substituted and shall be deemed to have been substituted with effect from the 1st day of October, 2009; (B) in sub-clause (vii), the word or shall be omitted with effect from the 1st day of June, 2010; (C) in sub-clause (viii), the word or shall be inserted at the end with effect from the 1st day of June, 2010; (D) after sub-clause (viii), the following sub-clause shall be inserted with effect from the 1st day of June, 2010, namely: (ix) bullion;; (b) after clause (vii), the following shall be inserted with effect from the 1st day of June, 2010, namely: Amendment of section 47A. Amendment of section 49. Amendment of

section 56. 6 of 2009. 5 10 15 20 25 30 35 40 45 508 http://indiabudget.nic.in (viia) where a firm or a company not being a company in which the public are substantially interested, receives, in any previous year, from any person or persons, on or after the 1st day of June, 2010, any property, being shares of a company not being a company in which the public are substantially interested, (i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; (ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration: Provided that this clause shall not apply to any such property received by way of a transaction

not regarded as transfer under clause (via) or clause (vic) or clause (vicb) or clause (vid) or clause (vii) of section 47. Explanation.For the purposes of this clause, fair market value of a property, being shares of a company not being a company in which the public are substantially interested, shall have the meaning assigned to it in the Explanation to clause (vii);. 22. In section 72A of the Income-tax Act, with effect from the 1st day of April, 2011, (a) after sub-section (6), the following shall be inserted, namely: (6A) Where there has been reorganisation of business whereby a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso to clause (xiiib) of section 47, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the predecessor company, shall be deemed to be the loss or allowance for depreciation of the successor limited liability partnership for the purpose of the previous year in which business reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly: Provided that if any of the conditions laid down in the proviso to clause (xiiib) of section 47 are not complied with, the set off of loss or allowance of depreciation made in any previous year in the hands of the successor limited liability partnership, shall be deemed to be the income of the limited liability partnership chargeable to tax in the year in which such conditions are not complied

with.; (b) in sub-section (7), for clauses (a) and (b), the following clauses shall, respectively, be substituted, namely: (a) accumulated loss means so much of the loss of the predecessor firm or the proprietary concern or the private company or unlisted public company before conversion into limited liability partnership or the amalgamating company or the demerged company, as the case may be, under the head Profits and gains of business or profession (not being a loss sustained in a speculation business) which such predecessor firm or the proprietary concern or the company or amalgamating company or demerged company, would have been entitled to carry forward and set off under the provisions of section 72 if the reorganisation of business or conversion or amalgamation or demerger had not taken place; (b) unabsorbed depreciation means so much of the allowance for depreciation of the predecessor firm or the proprietary concern or the private company or unlisted public company before conversion into limited liability partnership or the amalgamating company or the demerged company, as the case may be, which remains to be allowed and which would have been allowed to the predecessor firm or the proprietary concern or the company or amalgamating company or demerged company, as the case may be, under the provisions of this Act, if the reorganisation of business or conversion or amalgamation or demerger had not taken place;.

23. In section 80A of the Income-tax Act, after sub-section (6) and the Explanation thereto, the following sub-section shall be inserted with effect from the 1st day of April, 2011, namely: (7) Where a deduction under any provision of this Chapter under the heading C. Deductions in respect of certain incomes is claimed and allowed in respect of profits of any of the specified business referred to in clause (c) of sub-section (8) of section 35AD for any assessment year, no deduction shall be allowed under the provisions of section 35AD in relation to such specified business for the same or any other assessment year.. Amendment of section 72A. Amendment of section 80A. 5 10 15 20 25 30 35 40 45 50 559 http://indiabudget.nic.in

24. After section 80CCE of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2011, namely: 80CCF. In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year relevant to the assessment year beginning on the 1st day of April, 2011, as subscription to long-term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government.. 25. In section 80D of the Income-tax Act, in sub-section (2), in clause (a), after the words his family, the words or any contribution made to the Central Government Health Scheme shall be inserted with effect from the 1st day of April, 2011. 26. In section 80GGA of the Income-tax Act, in sub-section (2), with effect from the 1st day of April, 2011, (a) in clause (a), for the words scientific research association, the words research association shall be substituted; (b) in clause (aa), (A) for the words to a University, the words to a research association which has as its object the undertaking of research in social science or statistical research or to a University shall be substituted; (B) in the proviso, for the words such University, the words such association, University shall be substituted;

(C) in the Explanation, for the words scientific research association, the words research association shall be substituted. 27. In section 80-IB of the Income-tax Act, in sub-section (10), (i) in clause (a), (a) in sub-clause (ii), after the words, figures and letters the 1st day of April, 2004, the words, figures and letters but not later than the 31st day of March, 2005 shall be inserted; (b) after sub-clause (ii), the following sub-clause shall be inserted, namely: (iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority.; (ii) in clause (d), (a) for the words five per cent., the words three per cent. shall be substituted; (b) for the words two thousand square feet, whichever is less, the words five thousand square feet, whichever is higher shall be substituted. 28. In section 80-ID of the Income-tax Act, in sub-section (2), with effect from the 1st day of April, 2011, (a) in clause (i), for the words, figures and letters the 31st day of March, 2010, the words, figures and letters the 31st day of July, 2010 shall be substituted; (b) in clause (ii), for the words, figures and letters the 31st day of March, 2010, the words, figures and letters the 31st day of July, 2010 shall be substituted. 29. In section 115JAA of the Income-tax Act, after sub-section (6), the following shall be inserted with effect from the 1st day of April, 2011, namely:

(7) In case of conversion of a private company or unlisted public company into a limited liability partnership under the Limited Liability Partnership Act, 2008, the provisions of this section shall not apply to the successor limited liability partnership. Explanation.For the purposes of this section, the expressions private company and unlisted public company shall have the meanings respectively assigned to them in the Limited Liability Partnership Act, 2008.. Deduction in respect of subscription to long-term infrastructure bonds. Insertion of new section 80CCF. Amendment of section 80D. Amendment of section 80GGA. Amendment of section 80-IB. Amendment of section 80-ID. Amendment of section

115JAA. 6 of 2009. 6 of 2009. 5 10 15 20 25 30 35 40 4510 http://indiabudget.nic.in 30. In section 115JB of the Income-tax Act, in sub-section (1), with effect from the 1st day of April, 2011, (a) for the words, figures and letters the 1st day of April, 2010, the words, figures and letters the 1st day of April, 2011 shall be substituted; (b) for the words fifteen per cent. at both the places where they occur, the words eighteen per cent. shall be substituted. 31. In section 115WE of the Income-tax Act, in sub-section (1B), for the words, figures and letters after the 31st day of March, 2010, the words, figures and letters after the 31st day of March, 2011 shall be substituted. 32. In section 139 of the Income-tax Act, in sub-section (4C), for the words scientific research association at both the places where they occur, the words research association shall be substituted

with effect from the 1st day of April, 2011. 33. In section 142A of the Income-tax Act, in sub-section (1), for the words, figures and letter section 69B is required to be made, the words, figures, letter and brackets section 69B or fair market value of any property referred to in sub-section (2) of section 56 is required to be made shall be substituted with effect from the 1st day of July, 2010. 34. In section 143 of the Income-tax Act, (a) in sub-section (1B), for the words, figures and letters after the 31st day of March, 2010, the words, figures and letters after the 31st day of March, 2011 shall be substituted; (b) in sub-section (3), in the first proviso, for the words scientific research association, wherever they occur, the words research association shall be substituted with effect from the 1st day of April, 2011. 35. In section 194B of the Income-tax Act, for the words five thousand rupees, the words ten thousand rupees shall be substituted with effect from the 1st day of July, 2010. 36. In section 194BB of the Income-tax Act, for the words two thousand five hundred rupees, the words five thousand rupees shall be substituted with effect from the 1st day of July, 2010. 37. In section 194C of the Income-tax Act, in sub-section (5), with effect from the 1st day of July, 2010, (a) for the words twenty thousand rupees, the words thirty thousand rupees shall be substituted; (b) in the proviso, for the words fifty thousand rupees, the words seventy-five thousand rupees shall be substituted.

38. In section 194D of the Income-tax Act, in the second proviso, for the words five thousand rupees, the words twenty thousand rupees shall be substituted with effect from the 1st day of July, 2010. 39. In section 194H of the Income-tax Act, in the first proviso, for the words two thousand five hundred rupees, the words five thousand rupees shall be substituted with effect from the 1st day of July, 2010. 40. In section 194-I of the Income-tax Act, in the first proviso, for the words one hundred and twenty thousand rupees, the words one hundred eighty thousand rupees shall be substituted with effect from the 1st day of July, 2010. 41. In section 194J of the Income-tax Act, in the first proviso to sub-section (1), in clause (B), for the words twenty thousand rupees, wherever they occur, the words thirty thousand rupees shall be substituted with effect from the 1st day of July, 2010. 42. In section 201 of the Income-tax Act, for sub-section (1A), the following subsection shall be substituted with effect from the 1st day of July, 2010, namely: (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest, (i) at one per cent. for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and

(ii) at one and one-half per cent. for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, Amendment of section 115JB. Amendment of section 139. Amendment of section 142A. Amendment of section 143. Amendment of section 115WE. Amendment of section 194B. Amendment of section 194BB. Amendment of section 194C. Amendment

of section 194D. Amendment of section 194H. Amendment of section 194-I. Amendment of section 194J. Amendment of section 201. 5 10 15 20 25 30 35 40 45 5011 http://indiabudget.nic.in and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200.. 43. In section 203 of the Income-tax Act, sub-section (3) shall be omitted.

44. In section 206C of the Income-tax Act, in sub-section (5), (a) the first proviso shall be omitted; (b) in the second proviso, for the words Provided further, the word Provided shall be substituted. 45. In section 245A of the Income-tax Act, in clause (b), with effect from the 1st day of June, 2010, (i) in the proviso, clauses (ii) and (iii) shall be omitted; (ii) in the Explanation, (a) clause (ii) shall be omitted; (b) after clause (iii), the following clause shall be inserted, namely: (iiia) a proceeding for assessment or reassessment for any of the assessment years, referred to in clause (b) of sub-section (1) of section 153A in case of a person referred to in section 153A or section 153C, shall be deemed to have commenced on the date of issue of notice initiating such proceedings and concluded on the date on which the assessment is made;; (c) in clause (iv), for the words, brackets and figures clause (ii) or clause (iii) or clause (iv) of the proviso, the words, brackets, figures and letter clause (iv) of the proviso or clause (iiia) of the Explanation shall be substituted. 46. In section 245C of the Income-tax Act, in sub-section (1), for the proviso, the following proviso shall be substituted with effect from the 1st day of June, 2010, namely: Provided that no such application shall be made unless, (i) in a case where proceedings for assessment or reassessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of a person referred to in section 153A or section 153C have been

initiated, the additional amount of income-tax payable on the income disclosed in the application exceeds fifty lakh rupees, (ii) in any other case, the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees, and such tax and the interest thereon, which would have been paid under the provisions of this Act had the income disclosed in the application been declared in the return of income before the Assessing Officer on the date of application, has been paid on or before the date of making the application and the proof of such payment is attached with the application.. 47. In section 245D of the Income-tax Act, in sub-section (4A), (a) in clause (ii), after the words, figures and letters the 1st day of June, 2007, the words, figures and letters but before the 1st day of June, 2010 shall be inserted; (b) after clause (ii), the following clause shall be inserted with effect from the 1st day of June, 2010, namely: (iii) in respect of an application made on or after the 1st day of June, 2010, within eighteen months from the end of the month in which the application was made.. 48. In section 256 of the Income-tax Act, after sub-section (2), the following subsection shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 1981, namely: (2A) The High Court may admit an application after the expiry of the period of six months referred to in sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period..

49. In section 260A of the Income-tax Act, after sub-section (2), the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of October, 1998, namely: (2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.. Amendment of section 203. Amendment of section 206C. Amendment of section 245A. Amendment of section 245C. Amendment of section 245D. Amendment of section 256. Amendment of section 260A. 5 10 15 20 25 30

35 40 45 5012 http://indiabudget.nic.in 50. In section 271B of the Income-tax Act, for the words one hundred thousand rupees, the words one hundred fifty thousand rupees shall be substituted with effect from the 1st day of April, 2011. 51. In section 282B of the Income-tax Act [as inserted by section 78 of the Finance (No. 2) Act, 2009], with effect from the 1st day of October, 2010, (a) in sub-section (1), for the words income-tax authority shall, the words, figures and letters income-tax authority shall, on or after the 1st day of July, 2011, shall be substituted; (b) in sub-section (3), for the words received by, the words, figures and letters received, on or after the 1st day of July, 2011, by shall be substituted. 52. In the First Schedule to the Income-tax Act, in rule 5, for clause (b) [as inserted by clause (ii) of section 80 of the Finance (No.2) Act, 2009], the following clause shall be substituted with effect from the 1st day of April, 2011, namely: (b) (i) any gain or loss on realisation of investments shall be added or deducted, as the case may be, if such gain or loss is not credited or debited to the profit and loss account; (ii) any provision for diminution in the value of investment debited to the profit and loss account, shall be added back;. Wealth-tax 53. In section 22A of the Wealth-tax

Features
Key Features of Budget 2010-2011 CHALLENGES ! To quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the double digit growth barrier. ! To harness economic growth to consolidate the recent gains in making development more inclusive. ! To address the weaknesses in government systems, structures and institutions at different levels of governance. OVERVIEW OF THE ECONOMY ! India among the first few countries in the world to implement a broad-based counter-cyclic policy package to respond to the negative fallout of the global slowdown. ! The Advance Estimates for Gross Domestic Product (GDP) growth for 2009-10 pegged at 7.2 per cent. The final figure expected to be higher when the third and fourth quarter GDP estimates for 2009-10 become available. ! The growth rate in manufacturing sector in December 2009 was 18.5 per cent the

highest in the past two decades. ! A major concern during the second half of 2009-10 has been the emergence of double digit food inflation. Government has set in motion steps, in consultation with the State Chief Ministers, which should bring down the inflation in the next few months and ensure that there is better management of food security in the country. CONSOLIDATING GROWTH Fiscal Consolidation ! With recovery taking root, there is a need to review public spending, mobilise resources and gear them towards building the productivity of the economy. ! Fiscal policy shaped with reference to the recommendations of the Thirteenth Finance Commission, which has recommended a calibrated exit strategy from the expansionary fiscal stance of last two years. ! It would be for the first time that the Government would target an explicit reduction in its domestic public debt-GDP ratio. http://indiabudget.nic.in2 http://indiabudget.nic.in Tax reforms

! On the Direct Tax Code (DTC) the wide-ranging discussions with stakeholders have been concluded Government will be in a position to implement the DTC from April 1, 2011. ! Centre actively engaged with the Empowered Committee of State Finance Ministers to finalise the structure of Goods and Services Tax (GST) as well as the modalities of its expeditious implementation. Endeavour to introduce GST by April, 2011 Peoples ownership of PSUs ! Ownership has been broad based in Oil India Limited, NHPC, NTPC and Rural Electrification Corporation while the process is on for National Mineral Development Corporation and Satluj Jal Vidyut Nigam. This will raise about Rs 25,000 crore during the current year. ! Higher amount proposed to be raised during the year 201011. Fertiliser subsidy ! A Nutrient Based Subsidy policy for the fertiliser sector has been approved by the Government and will become effective from April 1, 2010. ! This will lead to an increase in agricultural productivity and better returns for the

farmers, and overtime reduce the volatility in demand for fertiliser subsidy and contain the subsidy bill. Petroleum and Diesel pricing policy ! Expert Group to advise the Government on a viable and sustainable system of pricing of petroleum products has submitted its recommendations. ! Decision on these recommendations will be taken in due course. Improving Investment Environment Foreign Direct Investment ! Number of steps taken to simplify the FDI regime. ! Methodology for calculation of indirect foreign investment in Indian companies has been clearly defined. ! Complete liberalisation of pricing and payment of technology transfer fee and trademark, brand name and royalty payments. Financial Stability and Development Council ! An apex level Financial Stability and Development Council to be set up with a view to strengthen and institutionalise the mechanism for maintaining financial stability. ! This Council would monitor macro-prudential supervision of the economy,

including the functioning of large financial conglomerates, and address interregulatory coordination issues.3 http://indiabudget.nic.in Banking Licences ! RBI is considering giving some additional banking licenses to private sector players. Non Banking Financial Companies could also be considered, if they meet the RBIs eligibility criteria. Public Sector Bank Capitalisation ! Rs.16,500 crore provided to ensure that the Public Sector Banks are able to attain a minimum 8 per cent Tier-I capital by March 31, 2011. Recapitalisation of Regional Rural Banks (RRB) ! Government to provide further capital to strengthen the RRBs so that they have adequate capital base to support increased lending to the rural economy. Corporate Governance ! Government has introduced the Companies Bill, 2009 in the Parliament to replace the existing Companies Act, 1956, which will address issues related to regulation in corporate sector in the context of the changing business environment. Exports ! Extension of existing interest subvention of 2 per cent for one more year for exports

covering handicrafts, carpets, handlooms and small and medium enterprises. Agriculture Growth ! Government will follow a four-pronged strategy, covering (a) Agricultural production ! Rs. 400 crore provided to extend the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengal and Orissa. ! Rs. 300 crore provided to organise 60,000 pulses and oil seed villages in rain-fed areas during 2010-11 and provide an integrated intervention for water harvesting, watershed management and soil health, to enhance the productivity of the dry land farming areas. ! Rs. 200 crore provided for sustaining the gains already made in the green revolution areas through conservation farming, which involves concurrent attention to soil health, water conservation and preservation of biodiversity. (b) Reduction in wastage of produce ! Government to address the issue of opening up of retail trade. It will help in bringing down the considerable difference between farm gate, wholesale and retail prices.

! Deficit in the storage capacity met through an ongoing scheme for private sector participation FCI to hire godowns from private parties for a guaranteed period of 7 years. (c) Credit support to farmers ! Banks have been consistently meeting the targets set for agriculture credit flow in the past few years. For the year 2010-11, the target has been set at Rs.3,75,000 crore.4 http://indiabudget.nic.in ! In view of the recent drought in some States and the severe floods in some other parts of the country, the period for repayment of the loan amount by farmers extended by six months from December 31, 2009 to June 30, 2010 under the Debt Waiver and Debt Relief Scheme for Farmers. ! Incentive of additional one per cent interest subvention to farmers who repay short-term crop loans as per schedule, increased to 2% for 2010-11. (d) Impetus to the food processing sector ! In addition to the ten mega food park projects already being set up, the Government has decided to set up five more such parks.

! External Commercial Borrowings to be available for cold storage or cold room facility, including for farm level pre-cooling, for preservation or storage of agricultural and allied produce, marine products and meat. Infrastructure ! Rs 1,73,552 crore provided for infrastructure development which accounts for over 46 per cent of the total plan allocation. ! Allocation for road transport increased by over 13 per cent from Rs. 17,520 crore to Rs 19,894 crore. ! Rs 16,752 crore provided for Railways, which is about Rs.950 crore more than last year. India Infrastructure Finance Company Limited (IIFCL) ! IIFCLs disbursements are expected to touch Rs 9,000 crore by end March 2010 and reach around Rs 20,000 crore by March 2011. ! IIFCL has refinanced bank lending to infrastructure projects of Rs. 3,000 crore during the current year and is expected to more than double that amount in 2010-11. ! The take-out financing scheme announced in the last Budget is expected to initially provide finance for about Rs. 25,000 crore in the next three years. Energy

! Plan allocation for power sector excluding RGGVY doubled from Rs.2230 crore in 2009-10 to Rs.5,130 crore in 2010-11. ! Government proposes to introduce a competitive bidding process for allocating coal blocks for captive mining to ensure greater transparency and increased participation in production from these blocks. ! A Coal Regulatory Authority to create a level playing field in the coal sector proposed to be set up. ! Plan outlay for the Ministry of New and Renewable Energy increased by 61 per cent from Rs.620 crore in 2009-10 to Rs.1,000 crore in 201011. ! Solar, small hydro and micro power projects at a cost of about Rs.500 crore to be set up in Ladakh region of Jammu and Kashmir.5 http://indiabudget.nic.in Environment and Climate change ! National Clean Energy Fund for funding research and innovative projects in clean energy technologies to be established. ! One-time grant of Rs.200 crore to the Government of Tamil Nadu towards the cost of installation of a zero liquid discharge system at Tirupur to sustain knitwear industry.

! Rs.200 crore provided as a Special Golden Jubilee package for Goa to preserve the natural resources of the State, including sea beaches and forest cover. ! Allocation for National Ganga River Basin Authority (NGRBA) doubled in 2010-11 to Rs.500 crore. ! Schemes on bank protection works along river Bhagirathi and river Ganga-Padma in parts of Murshidabad and Nadia district of West Bengal included in the Centrally Sponsored Flood Management Programme. ! A project at Sagar Island to be developed to provide an alternate port facility in West Bengal. INCLUSIVE DEVELOPMENT ! The spending on social sector has been gradually increased to Rs.1,37,674 crore in 2010-11, which is 37% of the total plan outlay in 2010-11. ! Another 25 per cent of the plan allocations are devoted to the development of rural infrastructure. Education ! Plan allocation for school education increased by 16 per cent from Rs.26,800 crore in 2009-10 to Rs.31,036 crore in 2010-11. ! In addition, States will have access to Rs.3,675 crore for elementary education

under the Thirteenth Finance Commission grants for 2010-11. Health ! An Annual Health Survey to prepare the District Health Profile of all Districts shall be conducted in 2010-11. ! Plan allocation to Ministry of Health & Family Welfare increased from Rs 19,534 crore in 2009-10 to Rs 22,300 crore for 2010-11. Financial Inclusion ! Appropriate Banking facilities to be provided to habitations having population in excess of 2000 by March, 2012. ! Insurance and other services to be provided using the Business Correspondent model. By this arrangement, it is proposed to cover 60,000 habitations. ! Augmentation of Rs.100 crore each for the Financial Inclusion Fund (FIF) and the Financial Inclusion Technology Fund, which shall be contributed by Government of India, RBI and NABARD.6 http://indiabudget.nic.in Rural Development ! Rs. 66,100 crore provided for Rural Development. ! Allocation for Mahatma Gandhi National Rural Employment Guarantee Scheme stepped up to Rs.40,100 crore in 2010-11.

! An amount of Rs.48,000 crore allocated for rural infrastructure programmes under Bharat Nirman. ! Unit cost under Indira Awas Yojana increased to Rs.45,000 in the plain areas and to Rs.48,500 in the hilly areas. Allocation for this scheme increased to Rs.10,000 crore. ! Allocation to Backward Region Grant Fund enhanced by 26 per cent from Rs.5,800 crore in 2009-10 to Rs 7,300 crore in 2010-11. ! Additional central assistance of Rs 1,200 crore provided for drought mitigation in the Bundelkhand region. Urban Development and Housing ! Allocation for urban development increased by more than 75 per cent from Rs.3,060 crore to Rs.5,400 crore in 2010-11. ! Allocation for Housing and Urban Poverty Alleviation raised from Rs.850 crore to Rs.1,000 crore in 2010-11. ! Scheme of one per cent interest subvention on housing loan upto Rs.10 lakh, where the cost of the house does not exceed Rs.20 lakh announced in the last Budget extended up to March 31, 2011. Rs.700 crore provided for this scheme for the year 2010-11.

! Rs.1,270 crore allocated for Rajiv Awas Yojana as compared to Rs.150 crore last year. Micro, Small & Medium Enterprises ! High Level Council on Micro and Small Enterprises to monitor the implementation of the recommendations of High-Level Task Force constituted by Prime Minister. ! Allocation for this sector to be increased from Rs.1,794 crore to Rs.2,400 crore for the year 2010-11. ! The corpus for Micro-Finance Development and Equity Fund doubled to Rs.400 crore in 2010-11. Unorganised Sector National Social Security Fund for unorganised sector workers ! National Social Security Fund for unorganised sector workers to be set up with an initial allocation of Rs.1000 crore. This fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi workers etc. ! Rashtriya Swasthya Bima Yojana benefits extended to all such Mahatma Gandhi NREGA beneficiaries who have worked for more than 15 days during the preceding financial year.7 http://indiabudget.nic.in

! A new initiative, Swavalamban will be available for persons who join New Pension Scheme (NPS), with a minimum contribution of Rs.1,000 and a maximum contribution of Rs.12,000 per annum during the financial year 2010-11, wherein Government will contribute Rs.1,000 per year to each NPS account opened in the year 2010-11. Allocation of Rs.100 crore made for this initiative. Skill development ! National Skill Development Corporation has approved three projects worth about Rs 45 crore to create 10 lakh skilled manpower at the rate of one lakh per annum. ! An extensive skill development programme in the textile and garment sector to be launched by leveraging the strength of existing institutions and instruments of the Textile Ministry to train 30 lakh persons over 5 years. Social Welfare ! Plan outlay for Women and Child Development stepped up by almost 50 per cent. ! The ICDS platform being expanded for effective implementation of the Rajiv Gandhi Scheme for Adolescent Girls. ! Saakshar Bharat to further improve female literacy rate launched with a target of 7 crore non-literate adults which includes 6 crore women.

! Mahila Kisan Sashaktikaran Pariyojana to meet the specific needs of women farmers to be launched with a provision of Rs 100 crore as a sub-component of the National Rural Livelihood Mission. ! Plan outlay of the Ministry of Social Justice and Empowerment enhanced by 80 per cent to Rs.4500 crore. With this enhancement, the Ministry will be able to revise rates of scholarship under its post-matric scholarship schemes for SCs and OBC students. ! Plan allocation for the Ministry of Minority Affairs increased by 50 per cent from Rs.1,740 crore to Rs.2,600 crore for the year 2010-11. STRENGTHENING TRANSPARENCY & PUBLIC ACCOUNTABILTY ! Financial Sector Legislative Reforms Commission to be set up to rewrite and clean up the financial sector laws to bring them in line with the requirements of the sector. ! Rs 1,900 crore allocated to the Unique Identification Authority of India (UIDAI) for 2010-11. UIDAI will be able to meet its commitments of issuing the first set of UID numbers in the coming year ! A Technology Advisory Group for Unique Projects (TAGUP) to be set up to look

into various technological and systemic issues for effective tax administration and financial governance. ! Independent Evaluation Office (IEO) chaired by the Deputy Chairman, Planning Commission to be set up to evaluate the impact of flagship programmes.8 http://indiabudget.nic.in Security and Justice ! Allocation for Defence increased to Rs. 1,47,344 crore including Rs 60,000 crore for capital expenditure. ! About 2,000 youth to be recruited as constables in five Central Para Military Forces from Jammu and Kashmir in the year 2010. ! Planning Commission to prepare an integrated action plan for the thirty-three left wing extremism affected districts. Adequate funds will be made available to support the action plan. ! Government has approved the setting up of the National Mission for Delivery of Justice and Legal Reforms to help reduce legal backlog in courts from an average of 15 years at present to 3 years by 2012. BUDGET ESTIMATES 2010-11 ! The Gross Tax Receipts are estimated at Rs. 7,46,651 crore

! The Non Tax Revenue Receipts are estimated at Rs. 1,48,118 crore. ! The net tax revenue to the Centre as well as the expenditure provisions in 2010-11 have been estimated with reference to the recommendations of the Thirteenth Finance Commission. ! The total expenditure proposed in the Budget Estimates is Rs. 11,08,749 crore, which is an increase of 8.6 per cent over last year. ! The Plan and Non Plan expenditures in BE 2010-11 are estimated at Rs. 3,73,092 crore and Rs. 7,35,657 crore respectively. While there is 15 per cent increase in Plan expenditure, the increase in Non Plan expenditure is only 6 per cent over the BE of previous year. ! Fiscal deficit for BE 2010-11 at 5.5 per cent of GDP, which works out to Rs.3,81,408 crore. ! Taking into account the various other financing items for fiscal deficit, the actual net market borrowing of the Government in 2010-11 would be of the order of Rs.3,45,010 crore. This would leave enough space to meet the credit needs of the private sector.

! The rolling targets for fiscal deficit are pegged at 4.8 per cent and 4.1 per cent for 2011-12 and 2012-13, respectively. ! Against a fiscal deficit of 7.8 per cent in 2008-09, inclusive of oil and fertilizer bonds, the comparable fiscal deficit is 6.9 per cent as per the Revised Estimates for 2009-10. ! Conscious effort made to avoid issuing bonds to oil and fertilizer companies. Government would like to continue with this practice of extending Government subsidy in cash, thereby bringing all subsidy related liabilities into Governments fiscal accounting.9 http://indiabudget.nic.in PART B TAX PROPOSALS ! The Centralized Processing Centre at Bengaluru is now fully functional and is processing around 20,000 returns daily. This initiative will be taken forward by setting up two more Centres during the year. ! The Income Tax department has introduced Sevottam, a pilot project at Pune, Kochi and Chandigarh through Aayakar Seva Kendras, which provide a single window system for registration of all applications including those for redressal of grievances

as well as paper returns. The scheme will be extended to four more cities in the year. ! Automation of Central Excise & Service Tax, has already been rolled out throughout the country this year. Similarly, a Mission Mode Project for computerization of Commercial Taxes in States has been approved recently. With an outlay of Rs. 1133 crore of which the Centres share is Rs. 800 crore, the project will lay the foundation for the launch of GST. ! The income tax department to notify SARAL-II form for individual salaried taxpayers for the coming assessment year. ! Scope of cases which may be admitted by the Settlement Commission expanded to include proceedings related to search and seizure cases pending for assessment. Scope of Settlement Commission also expanded in respect of Central Excise and Customs to include certain categories of cases that hitherto fell outside its jurisdiction. ! Bi-lateral discussions commenced to enhance the exchange of bank related and other information to effectively track tax evasion and identify undisclosed assets of resident Indians lying abroad.

Direct Taxes ! Income tax slabs for individual taxpayers to be as follows Income upto Rs 1.6 lakh Nil Income above Rs 1.6 lakh and upto Rs. 5 lakh 10 per cent Income above Rs.5 lakh and upto Rs. 8 lakh 20 per cent Income above Rs. 8 lakh 30 per cent ! Deduction of an additional amount of Rs. 20,000 allowed, over and above the existing limit of Rs.1 lakh on tax savings, for investment in long-term infrastructure bonds as notified by the Central Government ! Besides contributions to health insurance schemes which is currently allowed as a deduction under the Income-tax Act, contributions to the Central Government Health Scheme also allowed as a deduction under the same provision. ! Current surcharge of 10 per cent on domestic companies reduced to 7.5 per cent. ! Rate of Minimum Alternate Tax (MAT) increased from the current rate of 15 per cent to 18 per cent of book profits.10 http://indiabudget.nic.in ! To further encourage R&D across all sectors of the economy, weighted deduction on expenditure incurred on in-house R&D enhanced from 150 per cent to 200 per

cent. Weighted deduction on payments made to National Laboratories, research associations, colleges, universities and other institutions, for scientific research enhanced from 125 per cent to 175 per cent. ! Payment made to an approved association engaged in research in social sciences or statistical research to be allowed as a weighted deduction of 125 per cent. The income of such approved research association shall be exempt from tax. ! Benefit of investment linked deduction under the Act extended to new hotels of two-star category and above anywhere in India to boost investment in the tourism sector. ! Allow pending projects to be completed within a period of five years instead of four years for claiming a deduction of their profits, as a one time interim relief to the housing and real estate sector. Norms for built-up area of shops and other commercial establishments in housing projects to be relaxed to enable basic facilities for their residents. ! Limits for turnover over which accounts need to be audited enhanced to Rs. 60 lakh for businesses and to Rs. 15 lakh for professions.

! Limit of turnover for the purpose of presumptive taxation of small businesses enhanced to Rs. 60 lakh. ! If tax has been deducted on payment by way of any expense and is paid before the due date of filing the return, such expenditure to be allowed for deduction. Interest charged on tax deducted but not deposited by the specified date to be increased from 12 per cent to 18 per cent per annum. ! To facilitate the conversion of small companies into Limited Liability Partnerships, transfer of assets as a result of such conversion not to be subject to capital gains tax. ! The advancement of any other object of general public utility to be considered as charitable purpose even if it involves carrying on of any activity in the nature of trade, commerce or business provided that the receipts from such activities do not exceed Rs.10 lakh in the year . ! Proposals on direct taxes estimated to result in a revenue loss of Rs. 26,000 crore for the year. Indirect Taxes ! Rate reduction in Central Excise duties to be partially rolled back and the standard

rate on all non-petroleum products enhanced from 8 per cent to 10 per cent ad valorem. ! The specific rates of duty applicable to portland cement and cement clinker also adjusted upwards proportionately. Similarly, the ad valorem component of excise duty on large cars, multi-utility vehicles and sports-utility vehicles increased by 2 percentage points to 22 per cent.11 http://indiabudget.nic.in ! Restore the basic duty of 5 per cent on crude petroleum; 7.5 per cent on diesel and petrol and 10 per cent on other refined products. Central Excise duty on petrol and diesel enhanced by Re.1 per litre each. ! Some structural changes in the excise duty on cigarettes, cigars and cigarillos to be made coupled with some increase in rates. Excise duty on all non-smoking tobacco such as scented tobacco, snuff, chewing tobacco etc to be enhanced. Compounded levy scheme for chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch packing machines to be introduced. Agriculture & Related Sectors ! Provide project import status with a concessional import duty of 5 per cent for the

setting up of mechanised handling systems and pallet racking systems in mandis or warehouses for food grains and sugar as well as full exemption from service tax for the installation and commissioning of such equipment. ! Provide project import status at a concessional customs duty of 5 per cent with full exemption from service tax to the initial setting up and expansion of Cold storage, cold room including farm pre-coolers for preservation or storage of agriculture and related sectors produce ; and Processing units for such produce. ! Provide full exemption from customs duty to refrigeration units required for the manufacture of refrigerated vans or trucks. ! Provide concessional customs duty of 5 per cent to specified agricultural machinery not manufactured in India; ! Provide central excise exemption to specified equipment for preservation, storage and processing of agriculture and related sectors and exemption from service tax to the storage and warehousing of their produce; and ! Provide full exemption from excise duty to trailers and semitrailers used in agriculture.

! Concessional import duty to specified machinery for use in the plantation sector to be, extended up to March 31, 2011 along with a CVD exemption. ! To exempt the testing and certification of agricultural seeds from service tax. ! The transportation by road of cereals, and pulses to be exempted from service tax. Transportation by rail to remain exempt. ! To ease the cash flow position for small-scale manufacturers, they would be permitted to take full credit of Central Excise duty paid on capital goods in a single installment in the year of their receipt. Secondly, they would be permitted to pay Central Excise duty on a quarterly, rather than monthly, basis. Environment ! To build the corpus of the National Clean Energy Fund, clean energy cess on coal produced in India at a nominal rate of Rs.50 per tonne to be levied. This cess will also apply on imported coal.12 http://indiabudget.nic.in ! Provide a concessional customs duty of 5 per cent to machinery, instruments, equipment and appliances etc. required for the initial setting up of photovoltaic

and solar thermal power generating units and also exempt them from Central Excise duty. Ground source heat pumps used to tap geo-thermal energy to be exempted from basic customs duty and special additional duty. ! Exempt a few more specified inputs required for the manufacture of rotor blades for wind energy generators from Central Excise duty. ! Central Excise duty on LED lights reduced from 8 per cent to 4 per cent at par with Compact Fluorescent Lamps. ! To remedy the difficulty faced by manufacturers of electric cars and vehicles in neutralising the duty paid on their inputs and components, a nominal duty of 4 per cent on such vehicles imposed. Some critical parts or subassemblies of such vehicles exempted from basic customs duty and special additional duty subject to actual user condition. These parts would also enjoy a concessional CVD of 4 per cent. ! A concessional excise duty of 4 per cent provided to soleckshaw, a product developed by CSIR to replace manually-operated rickshaws. Its key parts and components to be exempted from customs duty.

! Import of compostable polymer exempted from basic customs duty. Infrastructure ! Project import status to Monorail projects for urban transport at a concessional basic duty of 5 per cent granted. ! To allow resale of specified machinery for road construction projects on payment of import duty at depreciated value. ! To encourage the domestic manufacture of mobile phones accessories, exemptions from basic, CVD and special additional duties are now being extended to parts of battery chargers and hands-free headphones. The validity of the exemption from special additional duty is being extended till March 31, 2011. Medical Sector ! Uniform, concessional basic duty of 5 per cent, CVD of 4 per cent with full exemption from special additional duty prescribed on all medical equipments. A concessional basic duty of 5 per cent is being prescribed on parts and accessories for the manufacture of such equipment while they would be exempt from CVD and special additional duty. ! Full exemption currently available to medical equipment and devices such as

assistive devices, rehabilitation aids etc. retained. The concession available to Government hospitals or hospitals set up under a statute also retained. ! Specified inputs for the manufacture of orthopaedic implants exempted from import duty.13 http://indiabudget.nic.in Infotainment ! To address the difficulties experienced by film industry in importing digital masters of films for duplication or distribution loaded on electronic medium vis-a-vis those imported on cinematographic film, owing to a differential customs duty structure, customs duty to be charged only on the value of the carrier medium. The same dispensation would apply to music and gaming software imported for duplication. In all such cases the value representing the transfer of intellectual property rights would be subjected to service tax. ! Provide project import status at a concessional customs duty of 5 per cent with full exemption from special additional duty to the initial setting up Digital Head End equipment by multi-service operators. Precious Metals

! Rates on precious metals indexed as follows: On gold and platinum from Rs.200 per 10 grams to Rs.300 per 10 grams On silver from Rs.1,000 per kg to Rs.1,500 per kg. ! Basic customs on Rhodium a precious metal used for polishing jewellery reduced to 2 per cent. ! Basic customs duty on gold ore and concentrates reduced from 2 per cent ad valorem to a specific duty of Rs.140 per 10 grams of gold content with full exemption from special additional duty. Further, the excise duty on refined gold made from such ore or concentrate reduced from 8 per cent to a specific duty of Rs.280 per 10 grams. Other Proposals ! Full exemption from import duty available to specified inputs or raw materials required for the manufacture of sports goods expanded to cover a few more items. ! Basic customs duty on one of key components in production of micro-wave ovens, namely magnetrons, reduced from 10 per cent to 5 per cent. ! Value limit of Rs. 1 lakh per annum on duty-free import of commercial samples as personal baggage enhanced to Rs. 3 lakh per annum.

! Outright exemption from special additional duty provided to goods imported in a pre-packaged form for retail sale. This would also cover mobile phones, watches and ready-made garments even when they are not imported in pre-packaged form. The refund-based exemption is also being retained for cases not covered by the new dispensation. ! Toy balloons fully exempted from Central Excise duty. ! Reduction in basic customs duty on long pepper from 70 per cent to 30 per cent; ! Reduction in basic customs duty on asafoetida from 30 per cent to 20 per cent; ! Reduction in central excise duty on replaceable kits for household type water filters other than those based on RO technology to 4 per cent;14 http://indiabudget.nic.in ! Reduction in central excise duty on corrugated boxes and cartons from 8 per cent to 4 per cent; ! Reduction in central excise duty on latex rubber thread from 8 per cent to 4 per cent; and ! Reduction in excise duty on goods covered under the Medicinal and Toilet Preparations Act from 16 per cent to 10 per cent.

! Proposals relating to customs and central excise are estimated to result in a net revenue gain of Rs. 43,500 crore for the year. Service Tax ! Rate of tax on services retained at 10 per cent to pave the way forward for GST. ! Certain services, hitherto untaxed, to be brought within the purview of the service tax levy. These to be notified separately. ! Process of refund of accumulated credit to exporters of services, especially in the area of Information Technology and Business Process Outsourcing, made easy by making necessary changes in the definition of export of services and procedures. ! Accredited news agencies which provide news feed online that meet certain criteria, exempted from service tax. ! Proposals relating to service tax are estimated to result in a net revenue gain of Rs 3,000 crore for the year. ! Proposals on direct taxes estimated to result in a revenue loss of Rs. 26,000 crore for the year. Proposals relating to Indirect Taxes estimated to result in a net revenue gain of Rs.46,500 crore for the year. Taking into account the concessions being

given in the tax proposals and measures taken to mobilise additional resources, the net revenue gain is estimated to be Rs. 20,500 crore for the year.