Personal Tax exemption limit raised by Rs 20,000

New tax slabs:

Slabs (Rs)	Rate
1,80,000	Nil
1,80,000-5,00,000	10
5,00,000-8,00,000	20
8,00,001	30

Old tax slabs:

Slabs (Rs)	Rate
0 - 160000	0
160001 - 500000	10
500001 - 800000	20
800001 and above	30

Female individual taxpayer
New tax slabs:

Slabs (Rs)	Rate
upto 1,90,000	0
1,90,000-500000	10
500001-800000	20
800001 and above	30

 Old tax slabs:

Slabs (Rs)	Rate
0 - 190000	0
190001 - 500000	10
500001 - 800000	20
800001 and above	30

Senior Citizens
New tax slabs:

Slabs (Rs)	Rate
upto 250000	0
250000-500000	10
500001-800000	20
800001 and above	30

 Old tax slabs:

Slabs (Rs)	Rate
0 - 240000	0
240001 - 500000	10
500001 - 800000	20
800001 and above	30

Latest Updates of Union Budget 2011-12

Here are the latest updates:

* MF can accept subscription foreign investors who meet KYC norms
* Discussions underway to relax FDI policy
* To introduce Public Debt AMC of India Bill in FY12
* Divestment in FY12 seen at Rs 40000cr
* Preparations for GST rollout in final stages
* Will introduce GST Bill in current session
* Govt will move to direct transfer of fertiliser subsidy to cos
* Extension of NBS to cover urea under review
* Significant progress on the GST network
* Direct Tax Code will be effective April 1, 2012
* New Public debt mgmt bill to be introduced in Parliament soon
* DTC will be finalised in 2011
* Govt in the process of setting up independent debt managing committee within finance ministry
* Average inflation and current account deficit to be lower and better managed next yr
* Expect inflation and CAD to be lower in 2011-2012
* Current account deficit poses concerns due to its composition
* Exports grown by 29.4%; imports grown by 17.6%
* Current account deficit at 2009-10 levels
* Impact of monetary tightening to show up with a lag
* Huge differences between wholesale and retail prices not acceptable
* Expect RBI to moderate inflation in coming months
* Shortfalls in distribution and marketing systems in food
* Economy has shown resilience to external and internal shocks
* Consumers have been denied a seasonal fall in food prices

Sensex 100 points up ahead of Budget

The Sensex added 100 points ahead of Union Budget 2011-12 today, supported by financial, oil & gas, infrastructure, technology and metal companies' shares. However, auto and cement companies' shares were seeing selling pressure.

The 30-share BSE Sensex was trading at 17,807, up 107 points and the 50-share NSE Nifty gained 36 points at 5,339.

The breadth was positive - about 820 shares advanced while 272 shares declined on National Stock Exchange.

Experts were expecting some news on banking license, FDI in retail and fertiliser subsidy.

National Fertilisers, IVRCL Infra, IDFC, Pantaloon Retail and LIC Housing Finance were on buyers' radar.

Budget 2011: Focus areas

The Finance Minister Pranab Mukherjee will present the Union Budget 2011 today. He has a tough role to play as the country is reeling under inflation and high crude price has been a dampener. The major focus areas of the budget are likely to be:

* Fiscal Deficit: The market is talking about FY12 deficit of 5-5.5% but watch out for absolute figure as gross domestic product (GDP) has been revised from Rs 60 lakh crore to Rs 90 lakh crore. Hence, fiscal deficit absolute number can come at Rs 4.5 lakh crore instead of Rs 3 lakh crore even if the fiscal deficit is at 5%.

* Market Borrowing: The government could announce market borrowings of around Rs3.8 trillion (USD80 bn) - 4.5% of GDP, compared to a projected Rs 3.45 trillion (USD76 billion) in FY11, as the one-off telecom receipts are not available in FY12. Revenue growth to slow on lower tax buoyancy and no asset sale windfall is expected.

* Clarity on GST and DTC

* On taxation side: Some broad basing of the service tax, higher income tax exemptions, and a possible increase in excise duties on autos is expected.

* Sectors: The metals and capital goods industry is looking for an increase in import duties to protect domestic manufacturers. IT has asked for continuation of the STPI benefits, while oil companies have asked for a reduction in excise and customs duties. Real-estate companies have asked for tax sops for low-cost housing. Except for the sop to low-cost housing, other measures seem unlikely. In an attempt to boost tax revenues the government may focus on:
1) Increasing taxes on its favourite targets - cigarettes, alcohol, high-end consumer durables
2) Widening the services tax net
3) Rationalising excise duties by reducing exemptions or carve-outs (eg, small cars)
4) Introduction of cess to fund social sector schemes can not be ruled out

Railway Budget

Union Railway Minister Mamata Banerjee, while presenting her third Rail budget, not only kept fares and freight rates untouched, but also promised to invest Rs 57,630 crore (USD 12.68 billion) in the network in the financial year 2011/12. As expected, she barely attended to the mounting deficit of the transportation institution and instead yielded to gimmicks that befits a politician eyeing the polls—in this case, the West Bengal Assembly.

While announcing her Railway Budget, Ms Banerjee said she was optimistic that financial health of the Railways will be revived by FY12. "We will see Rs 5,260 crore savings in FY12,". Where, on one hand, Banerjee left passenger fares untouched and reduced AC booking charges from Rs 20 ro Rs 10. She also announced 85 proposals for PPP and okayed launch of nine new Duranto and three Shatabdi trains. For Mumbai, she proposed  raising capacity to 107 local trains.  (See Highlights)

The budget comes at a time when the railways are facing financial crunch with its operating ratio inching close to the 100-level mark. The Railway administration, which is coping with gloomy numbers has to deal with task of delivering what Laloo Prasad Yadav promised in his stint as the Railway Minister.

Despite populist meaures, Railway budget 2011 was a sheer disappointment for the markets. All railway stocks have reacted to the miserable announcement. Despite announcement of steps on anti-collision, Kernex Microsystems has failed to pick up.

Amongst the other populist measures announced by Mamata Banejee include a target of adding 700 km of annual rail line as compared to the current 150 km, to set up new coach factory at Kolar via PPP or JV and to set up additinal wagon units in Kerala via JV.