A Quick Glance at the Budget - Proposed tax changes in 2009/10 budget

India's finance minister on Monday proposed increasing the minimum alternate tax on firms, but scrapped a tax on commodity transactions.
Following are some of the proposed tax changes:

DIRECT TAXES

* No changes in corporate taxes
* Raises Minimum Alternate Tax (MAT) to 15 percent from 10 percent. The MAT was earlier introduced to make sure companies do not totally avoid taxation by claiming various deductions that cancelled out their tax liability altogether.
* Extends tax credit carry-over period under MAT to 10 years from seven years.
* Scraps Commodity Transaction Tax
* Scraps Fringe Benefit Tax
* Extends sunset clause on tax holidays for export profits by one year to 2010/11
* Tax holiday for natural gas production
* Increases personal income tax exemption to senior citizens by 15,000 rupees, by 10,000 rupees for others
* Elimiates 10 percent surcharge on personal income tax

INDIRECT TAXES

* Maintains overall structure of customs, excise duties and service tax
* Increases customs duty on gold bars to 200 rupees per 10 grams from 100 rupees per 10 grams
* Increases customs duty on other forms of gold, excluding jewellery, to 500 rupees per 10 grams from 250 rupees per 10 grams
* Restores 8 percent excise duty on manmade fibre and yarn
* Raises excise duty on several items to 8 percent from 4 percent, broadly exempting food items and medicines
* Exempts bio-diesel blended petrol, diesel from excise duty
* Cuts customs duty on bio-diesel to 2.5 percent fron 7.5 percent

NON-TAX REVENUES, REFORMS

* Intends to move to a system of direct subsidy transfer to farmers
* To set up panel to advise on a viable and sustainable fuel price policy
* To retain 51 percent government holding in state-run firms
* To encourage people's participation in stake sales in state-run firms
* State-run banks, insurance firms to remain with government, will be funded to grow
* Expects 497.50 billion rupees ($10.26 billion) from dividends, profits of state-run firms in 2009/10
* Targets 11.2 billion rupees from stake sales in 2009/10
* Expects 3G wireless spectrum auction to net 350 billion rupees in 2009/10