Taxpayers Upset| Budget 2007: What's friendly, what's not
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Presenting his fourth consecutive
budget, Finance Minister P Chidambaram greatly disappointed personal income
Chidambaram's Budget for
2007-08 on Wednesday proposed a marginal Rs 10,000 increase in threshold
tax exemption limit, while foisting an additional one per cent education
cess on them.
In the backdrop of rising
prices and high inflation, tax payers were expecting increase in exemption
limit by Rs 30,000 to Rs 50,000. But the threshold limit now stands at
Rs 110,000 against Rs 100,000 earlier. The increase in exemption limit,
which will provide a relief of Rs 1,000 to Rs 2,000, will be partly neutralised
by increase in education cess from 2 per cent to 3 per cent.
This has to be paid not only
on income tax but also on all products and services covered under excise,
customs and service tax.
The finance minister has
also put additional burden on tax payers investing in stock markets by
raising dividend distribution tax from 12.5 per cent to 15 per cent. The
Budget proposes to increase the income tax exemption limit from Rs 100,000
to Rs 110,000. For women, the exemption limit has been raised from Rs 135,000
to Rs 145,000, and for senior citizens from Rs 185,000 to Rs 195,000.
Budget: What's friendly,
Finance Minister P Chidambaram
presented a mixed bag of proposals for the capital markets on Wednesday.
1) PAN to be made sole identification
number for all participants in securities market with an alpha-numeric
prefix or suffix to distinguish a particular kind of account;
2) Idea of Self Regulating
Organisations (SRO) to be taken forward for different market participants
under regulations to be made by Sebi;
3) Mutual funds to be permitted
to launch and operate dedicated infrastructure funds;
4) Individuals to be permitted
to invest in overseas securities through Indian mutual funds;
5) Short-selling settled
by delivery, and securities lending and borrowing to facilitate delivery,
by institutions to be allowed;
6) Enabling mechanism to
be put in place to permit Indian companies to unlock a part of their holdings
in group companies for meeting their financing requirements by issue of
1) Rate of dividend distribution
tax to be raised from 12.5 per cent to 15 per cent on dividends distributed
2) ..and to 25% on dividends
paid by money market mutual funds and liquid mutual funds to all investors.
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