While Pranab Mukherjee has announced tax-relief of Rs.2000 for all categories of tax-payers in his direct tax proposals, the positive effect has been off-set by recovering his losses from the indirect taxes on various goods and services.
What’s heavy?
Air Travel – The journey gets expensive!
Travelling through railways will be a convenient option if the rates of airways have hiked. In no uncertain terms domestic air travel will be more expensive by Rs.50 and international travel to be dearer by Rs.250 on account of levy of service tax.
On travel by higher classes, it will be 10% flat extra levy.
Hotes and Restaurants – Should we skip good food & life?
Hotel accommodation, in excess of declared tariff of Rs.1000 per day, and service provided by air-conditioned restaurants-cum-bars has been brought under the service tax net. The effective burden will be around 3% of the restaurant bill amount. So, you can look for family restaurants, if you want to skip this extra burden.
Branded Clothes – Only for the rich?
Finance minister says that as part of base expansion, he proposes to levy 10% excise duty on branded garments as well as increases confessional central excise duty to 5%.
Crude Oil – Change undesired!
The FM left the customs duty on crude oil unchanged at 5%, and that on petrol and diesel untouched at 7.5%. Undoubtedly, this ambiguity in the fuel-cost management has left petrol prices remaining under-priced by Rs.2.25 a litre and diesel losses standing at little over Rs.10 per litre.
Stationery – Time to save up leakage of inks!
The paper used in printing the text-books and note-books will attract excise duty now.
The government wants to render education as a universal right across the country. But, contrastingly, he taxes the stationery items used by school children – such as text-books, note-books, ball pen ink, geometry boxes, pencil, sharpeners and whatever you can think about.
All the above items which were earlier exempt from excise duty have now been brought under the levy of 1% CENVAT credit facility.
What’s Light?
Mobile phones – In budgets, everyone can own one!
Communication is an important in today’s life rather compulsory. The FM has extended the concession regime for the components that goes into manufacture of mobile handsets for one more year. In fact, not just phones; even other electronic items such as refrigerators and LED lights have become cheaper in this budget.
Cars/Transportation – Going fuel-efficient way!
Overall speaking, the Union Budget 2011 has been a positive one for the automobile sector. The government has retained excise duty at 10% on all small cars, two wheelers and three wheelers.
Apart from that, FM has expressed desire to launch National Mission for hybrid and electric vehicles. He has also halved the excise duty to 5% on hybrid kits for conversion of vehicles running on fossil fuels to hybrid category.
Housing Loans – Live up with the society status!
The loans for affordable home category have got cheaper. But, it would be more of Tier 2 and 3 cities which will be more beneficial of these low-cost housing schemes. In metro cities, it is hard to find houses below Rs.25 lakh range.
The budget has provided 1% interest subsidy on home loans of upto Rs.15 lakh against the current levels of Rs.10 lakh. This means that the sops are gradually moving towards the more realistic, low-cost housing prices of upto Rs.25 lakh range.
Sanitary Napkins & Diapers – Hygiene concerns?
A survey says that 68% of Indian rural women can’t afford sanitary napkins. The FM has reduced the excise duty on sanitary napkins, baby and clinical diapers to 1% from 10% in the Union Budget 2011.
Source: http://trak.in/tags/business
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