EXPECTATIONS FROM FINANCE BUDGET, 2012

The Finance Minister may consider following amendments to be incorporated in his budget presentations on 16th March, 2012.

Direct Taxes -

1) Threshold limit should be raised from Rs. 180,000/- to Rs. 3,00,000/- for all assesses.

2) Agricultural income over Rs. 5,00,000/- should be taxed at flat rate of 15%.

3) Bank, Post Office interest should be exempted upto Rs. 50,000/-.

4) Saving limit should be raised from Rs. 1,00,000/- to Rs. 2,00,000/-.

5) All short term capital gains to be taxed at 15%. All long term capital gains to be taxed at 10%.

6) All interest and rental income of charitable and religious trusts to be taxed. Trust should not be allowed to do business.

7) Exempted income should not have application of rule - 8D u/s 14A.

8) Standard deduction of 30% of salary should be allowed.

9) MAT should be reduced to 12% and income exempt u/s 10(38) should not be considered for MAT calculation.

10) Surcharge and education cess may be abolished.

11) Maximum rate of tax on companies and firms may be reduced to 27%.

12) Foreign companies should be taxed at least 35%.

13) All Foreign remittances and deposits in bank accounts from unknown sources should be taxed at 35%.

14) Audit requirements should be applicable only when turnover exceeds 1 crore or value of services rendered exceeds 50 lakhs.

15) Books of accounts should be required only if the turnover exceeds Rs. 25 lakhs.

16) Wealth tax limit should be raised to 2 crores.

Indirect Taxes - Service Tax

1) Basic limit should be raised to Rs. 25 lakhs.

2) All services to be covered, no exemption.

3) Service tax to be charged at 10% flat with MODVAT facility.

4) No classification of different type of services.

Indirect Taxes – Excise Duty

1) Hundreds of classifications should be reduced to following 3 categories:

a. Essentials of life - to be exempted from Excise duty

b. General Items - to be taxed at 10%

c. Items of Luxuries - to be taxed at 30%

2) Excise Duty limit for Small scale industries should be increased to Rs. 3 crores.

Indirect Taxes - Customs Duty

1) Hundreds of classification should be reduced to following 5 classes:

a. Basic Food / Medicine etc. items - NIL duty

b. Other food items - 40%

c. Industrial items - 15%

d. Other items of common use - 20%

e. Luxury items – 35%

2) Baggage allowance should be increased to Rs. 1,00,000/-.

These simple amendments will make the life of a common person happy and comfortable and provide protection to home industry. Tax burden will be shifted on richer class.

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