Positives And Negatives Of Budget 2011

POSITIVES
• Citizens over 80 years to have exemption limit of Rs 5 lakh
• Surcharge for companies cut to 5 per cent, from 7.5 per cent
• Priority sector lending for housing raised from Rs.20 lakh to Rs.25 lakh
• FII limit of investment in infrastructure raised to $25 bn and is expected to be raised to $40 bn soon.
• Special incentives for hybrid vehicle makers if manufacturing done in India to be positive for auto companies
• Cars become less costlier
• Duty reduced on hybrid & electric cars along with batteries imported for such vehicles
• Senior Citizen Age Limit reduced from 65 years to 60 years for Income Tax purposes
• Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent
• MFs allowed to raise money from foreign investors.
• No import duty on ship parts
• Basic food and fuel and precious stones, gold and silver jewellery to be exempted from central excise duty
• Nominal 1 per cent central excise duty on 130 items entering the tax net
• Government has cut many import duties to check inflation
• Disinvestments to be taken further
• Crude palm used in sports exempted from customs duty to be positive for palm oil companies
• Excise duty to be reduced from 10% to 5% on parts of specified machinery

NEGATIVES
• AC hospitals with over 25 beds to be taxed for services
• Health Check-Ups in Private hospitals to become expensive
• Both International Air Travel and Domestic Air Travel become expensive
• Tax on life insurance service providers could be negative for insurance companies
• Travel, Healthcare to become expensive due to increased service tax
• Lack of FDI in retail, a disappointment
• New service tax to hurt companies in hospitality
• Hike in export duty on Iron Ore
• AC restaurants serving liquor to come under service tax net
• Branded clothes may cost more
• Rise in MAT from 18% to 18.5%