Budget 2011: key positives and negatives – ET Analysis

Posted on February 28, 2011 by

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Positives:

1. Excise duty to be reduced from 10% to 5% on parts of specified machinery
2. Surcharge for companies cut to 5 per cent, from 7.5 per cent
3. Citizens over 80 years to have exemption limit of Rs 5 lakh
4. Special incentives for hybrid vehicle makers if manufacturing done in India to be positive for auto companies
5. Crude palm used in sports exempted from customs duty to be positive for palm oil companies
6. Duty reduced on hybrid & electric cars along with batteries imported for such vehicles
7. Senior Citizen Age Limit reduced from 65 years to 60 years for Income Tax purposes
8. Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent
9. Indian MFs allowed to raise money from foreign investors
10. No import duty on ship parts positive for SCI
11. Tax exemption limit for senior citizens raised to Rs 2.5 lakh from 2.4 lakh
12. Basic food and fuel and precious stones, gold and silver jewellery to be exempted from central excise duty
13. Nominal 1 per cent central excise duty on 130 items entering the tax net
14. LED to cost less
Negatives:
1. AC restaurants serving liquor to come under service tax net
2. Health Check-Ups in Private hospitals to become expensive
3. EXPENSIVE: International Air Travel
4. EXPENSIVE: Domestic Air Travel
5. Tax on life insurance service providers could be negative for insurance companies
6. Travel, Healthcare to become expensive due to increased service tax
7. Lack of FDI in retail was a disappointment
8. New service tax to hurt companies in hospitality
9. Hike in export duty on Iron Ore is a negative
10. Branded clothes may cost more
11. FY 11 fiscal deficit above estimates
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Posted in: Budget - 2011