The Budget Speech
And now I turn to my tax proposals
Direct Taxes first.
I propose to exempt personal income up to Rs. 3 Lakhs totally from Income Tax, that is those who have income up to Rs. Three lakhs per annum will not have to pay any Income Tax at all.
Income above three lakhs and up to Rs 12 lakhs will be charged at a flat rate of 10% with no surcharge, no exemptions, no cess and of course no stress.
Income above Rs. 12 lakhs and up to Rs. 25 lakhs will be charged at 20%.
For income above Rs. 25 lakhs, the tax rate will be 25%.
All exemptions except a few will be withdrawn.
India Education and health fund: I propose to start this fund initially with donations from Indians in India and abroad who have benefited from education in India. I would request all NRIs to donate liberally to this fund. I propose to work out a scheme whereby Indian students going abroad, on securing jobs abroad will be compulsorily required to pay an annual tax of 1000 dollars which will be in the form of a donation to this fund. All donations from Residents to this fund will be totally exempted. The fund will be managed by a committee of eminent persons and will be used for promotion of education and health.
Corporate Tax: I propose to exempt corporate income up to Rs. Ten lakhs and have a uniform tax rate of ten percent for income above ten lakhs. I propose to abolish FBT , BTT and all surcharges and cesses.
Indirect Taxes:
Customs : I propose to maintain a uniform rate of 5% Customs duty on all items of permitted imports. On a few selected items, I propose to impose a duty of 15%. There will be no additional duties or cesses, except of course CVD to protect the local industry.
Central Excise: I propose to reduce the Cenvat rate to 3% on all goods except tobacco products, for which the tax would be 50% of the MRP . I propose to abolish the Cenvat credit system. There will be no credit and no exemption except for captive consumption, SSI exemption up to Rs. 2 Crores and exports.
Service Tax: I propose to reduce the Service Tax rate to 3% without Cenvat credit facility. Turnover up to Rs. Ten lakhs in a year will be exempted.
Immunity Scheme: In all pending cases as on 29.2.2008 in income tax, customs, Central Excise and Service Tax with the departmental authorities or appellate tribunals, or courts, the case will be deemed to be settled if the assessee pays 25% of the demanded duty, tax, cess and there will be no penalty or interest. An assessee can also voluntarily declare any tax or duty, not paid in the last ten years and pay 25% of such escaped duty or tax and get immunity from all proceedings including prosecution. Details of the scheme are being worked out and will be announced in a few days.
I hope all the tax payers in the country will cooperate with me and ensure that the lowered taxes are paid truthfully and …………..
Oh! My God! I woke up with a start – that was a stupid dream. I wanted to be fresh for the budget and allowed myself the luxury of an early sleep and this was the speech I heard in my dream. It's only a dream, I sadly realise. But I have a DDT to do before the day starts.
It's the Budget Day – let's have nothing but the budget and let me inform you nothing great has happened yesterday.