- DTC Bill to be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee.
- DTC rates proposed to be introduced for personal income tax.
- Exemption limit for the general category of individual taxpayers enhanced from INR 1,80,000 to INR 2,00,000.
- Upper limit of 20 per cent tax slab raised from INR 8 lakhs to INR 10 lakhs.
- Deduction of INR 10,000 allowed to individual tax payers for interest from savings bank accounts.
- Deduction of up to INR 5,000 allowed for preventive health check up.
- Senior citizens not having income from business exempted from payment of advance tax.
- Repatriation of dividends from foreign subsidiaries of Indian companies at a lower tax rate of 15 per cent up to 31.3.2013 to be allowed.
- Low cost funds to be provided to stressed infrastructure sectors, rate of withholding tax on interest payment on ECBs proposed to be reduced from 20 per cent to 5 per cent for 3 years for certain sectors.
- Restriction on Venture Capital Funds to invest only in 9 specified sectors to be removed.
- Investment link deduction of capital expenditure for certain businesses to be provided at the enhanced rate of 150 per cent.
- New sectors to be added for the purposes of investment linked deduction.
- Weighted deduction of 200 per cent extended for R&D expenditure in an in-house facility for a further period of 5 years beyond March 31, 2012.
- Weighted deduction of 150 per cent extended on expenditure incurred for agri-extension services.
- The sunset date for setting up power sector undertakings to be extended by one year for claiming 100 per cent deduction of profits for 10 years.
- Turnover limit for compulsory tax audit of account and presumptive taxation of SMEs to be raised from INR 60 lakhs to INR 1 crore.
- Exemption from Capital Gains tax on sale of residential property, if sale consideration is used for subscription in equity of a manufacturing SME for purchase of new plant and machinery.
- Weighted deduction to be provided at 150 per cent of expenditure incurred on skill development in manufacturing sector.
- All services except those in the negative list comprising of 17 heads to be taxed
- Service tax law to be shorter by nearly 40 per cent.
- To harmonize the Central Excise and Service tax a common simplified registration form and a common return comprising of one page has been provided.
- Revision Application Authority and Settlement Commission being introduced in Service Tax for dispute resolution.
- Utilization of input tax credit permitted in number of services to reduce cascading of taxes.
- Place of Supply Rules for determining the location of service to be put in public domain for stakeholders’ comments.
- New scheme announced for simplification of refunds.
- Service tax rate to be raised from 10 per cent to 12 per cent, with corresponding changes in rates for individual services.
- Drafting of model legislation for the Centre and State GST in concert with States is under progress.
- Standard rate of excise duty to be raised from 10 per cent to 12 per cent, merit rate from 5 per cent to 6 per cent and the lower merit rate from 1 per cent to 2 per cent with few exemptions.
- Excise duty on large cars to be enhanced.
- Agriculture and Related Sectors
- Basic customs duty reduced for certain agricultural equipment and their parts.
- Full exemption from basic customs duty for import of equipment for expansion or setting up of fertiliser projects upto March 31, 2015.
- Proposal for full exemption from basic customs duty and a concessional CVD of 1 per cent to steam coal till 31st March, 2014.
- Full exemption from basic duty provided to certain fuels for power generation.
Full exemption from basic customs duty to coal mining project imports.
Basic custom duty to be reduced for machinery and instruments needed for surveying and prospecting for minerals.
- Basic custom duty to be reduced for equipments required for installation of train protection and warning system and up gradation of track structure for high speed trains.
- Full exemption from import duty on certain categories of specified equipment needed for road construction, tunnel boring machines and parts of their assembly.
- Tax concessions for parts of aircraft and testing equipment for third party maintenance, repair and overhaul of civilian aircraft.
- Blueprint to be developed for long distance gas pipelines leading to a National Gas Grid to facilitate transportation of gas across the length and breadth of the country.
- Relief extended to sectors such as steel, textiles, branded readymade garments, low-cost medical devices, labour-intensive sectors producing items of mass consumption and matches produced by semi-mechanized units.
Health and Nutrition
- Concessional basic customs duty of 5 per cent extended with full exemption from excise duty/CVD to 6 specified life saving drugs/vaccines.
- Basic customs duty and excise duty reduced on Soya products to address protein deficiency among women and children.
- Basic customs duty and excise duty reduced on Iodine.
- Basic customs duty reduced on Probiotics.
- Concessions and exemptions proposed for encouraging the consumption of energy-saving devices, plant and equipment needed for solar thermal projects.
- Concession from basic customs duty and special CVD being extended to certain items imported for manufacture for hybrid or electric vehicle and battery packs for such vehicles.
- Proposal to increase basic customs duty on imports of gold and other precious metals.
- Additional Resource Mobilisation
- Excise duty to be increased on ‘demerit’ goods such as certain cigarettes, hand-rolled bidis, pan masala, gutkha, chewing tobacco, unmanufactured tobacco and zarda scented tobacco.
- Cess on crude petroleum oil produced in India revised to Rs 4,500 per metric tonne.
- Basic customs duty to be enhanced for certain categories of completely built units of large cars/MUVs/SUVs
Sector Wise Analyze
Infrastructure and Industrial Development
- During Twelfth Plan period, investment in infrastructure to go up to 50 lakh crore with half of this, expected from private sector.
- More sectors added as eligible sectors for Viability Gap Funding under the scheme “Support to PPP in infrastructure”.
- Government has approved guidelines for establishing joint venture companies by defence PSUs in PPP mode.
- First Infrastructure Debt Fund with an initial size of `8,000 crore launched earlier this month.
- Tax free bonds of 60,000 crore to be allowed for financing infrastructure projects in 2012-13.
- A harmonised master list of infrastructure sector approved by the Government.
- IIFCL has put in place a structure for credit enhancement and take-out finance for easing access of credit to infrastructure projects.
National Manufacturing Policy
- National Manufacturing Policy announced with the objective of raising, within a decade, the share of manufacturing in GDP to 25 per cent and creating of 10 crore jobs.
Power and Coal
- Coal India Limited advised to sign fuel supply agreements with power plants, having long-term PPAs with DISCOMs and getting commissioned on or before March 31, 2015
- External Commercial Borrowings (ECB) to be allowed to part finance Rupee debt of existing power projects.
Transport: Roads and Civil Aviation
- Target of covering a length of 8,800 kilometre under NHDP next year.
- Allocation of the Road Transport and Highways Ministry enhanced by 14 percent to 25,360 crore.
- ECB proposed to be allowed for capital expenditure on the maintenance and operations of toll systems for roads and highways, if they are part of original project.
- Direct import of Aviation Turbine Fuel permitted for Indian Carriers as actual users.
- ECB to be permitted for working capital requirement of airline industry for a period of one year, subject to a total ceiling of US $ 1 billion.
- Proposal to allow foreign airlines to participate upto 49 per cent in the equity of an air transport undertaking under active consideration of the government.
- Various proposals to address the shortage of housing for low income groups in major cities and towns including allowing ECB for low cost housing projects and setting up of a credit guarantee trust fund etc.
- Government has taken steps to finalise pricing and investment policies for urea to reduce India’s import dependence in urea.
- Government has announced a financial package of Rs 3,884 crore for waiver of loans of handloom weavers and their cooperative societies.
Micro, Small and Medium Enterprises
- Rs 5,000 crore India Opportunities Venture Fund to be set up with SIDBI.
- Policy requiring Ministries and CPSEs to make a minimum of 20 per cent of their annual purchases from MSEs approved. Of this, 4 per cent earmarked for procurement from MSEs owned by SC/ST entrepreneurs.
- Introduction of amendments to the FRBM Act as part of Finance Bill, 2012.
- All three public sector Oil Marketing Companies have launched LPG transparency portals to improve customer service and reduce leakage.
- Efforts to arrive at a broad based consensus in consultation with the State Governments in respect of decision to allow FDI in multi-brand retail up to 51 per cent
To discuss how your organization can address these issues, please contact:
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