Tax relief to individuals, promise to curb black money, major push on infrastructure, capital market reforms and huge subsidy cut were among proposals listed by finance minister Pranab Mukherjee in the Union Budget for 2012-13.

The proposals will give some direct tax relief to individuals, even as eating out, buying luxury cars, air travel, availing some professional services and investing in gold jewellery will become costlier.

Presenting his 7th budget in the Lok Sabha on Friday, the finance minister said the exemption limit for personal income tax was being enhanced from Rs 1,80,000 to Rs 2,00,000, even as the limit for peak rate was being raised to Rs 10,00,000 from Rs 8,00,000.

“This will provide tax relief of Rs 2,000 to every tax payer,” the finance minister said, adding: “My proposal on direct taxes will result in a revenue loss of Rs 4,500 crore.”

Take a look at the revised Tax slab:
Income up to Rs 2 lakh – NIL
Income between Rs 2 lakh to Rs 5 lakh – 10 per cent
Income between Rs 5-10 lakh – 20 per cent
Income above Rs 10 lakh – 30 per cent

Senior citizens to be exempt from advance tax payment.

Health insurance deduction up to Rs 5,000 for preventive health checkup.

Tax savings under new proposals: Rs 3-8 lakhs – Rs 2060; Rs 9 lakhs – 12,360; Rs 10-25 lakhs – Rs 22,660

Other important announcements so far:

• Service tax raised from 10 per cent to 12 per cent
• Deduction of up to Rs.10,000 from interest from savings bank accounts.
• No change in corporate taxes but measures to enable them better access funds
• Witholding tax on external commercial borrowings reduced from 20 percent to five percent for power, airlines, roads, bridges, affordable houses and fertiliser sectors.
• Car, TV, stay in hotels, eating out in restaurants to be expensive
• Large cars, imported bicycles, cigarettes, bidis and some imported jewellery to cost more; branded silver jewellery may get cheaper.
• Economy expected to gain ground: GDP growth rate pegged at 7.6 per cent in 2012-13; Subsidy Expenditure to be checked and higher tax revenues targetted; Rs 30,000 crore to be raised from disinvestment.
• Individual tax slabs moving towards Direct Tax Code to be introduced from Aug 2012.
• Addressing malnutrition, black money and corruption in public life among five priorities in year ahead.
• India’s inflation structural, driven largely by agricultural constraints.
• Major boost to infra companies; power companies – More funds provided and tax exemptions given.

Highlights:
During his speech Pranab Mukherjee said, “GDP grew by 6.9 per cent in 2011-12″

“Economy is now turning around, manufacturing appears to be on revival”, he said. Adding that there is need to accelerate the pace of reforms.

We have to expedite decisions to improve delivery systems to address problems of black money and corruption, the Finance Minister said.

“Expect average inflation to be lower next year; expect current account deficit to be lower next year”, Pranab added. Stating that, Amendments to FRBM Act are part of the budget.

The finance minister said that efforts were on to arrive at a broadbased consensus with state governments on allowing FDI in multi-brand retail up to 51 per cent.

“India will become self-sufficient in urea production in five years”, he said.

Information on black money stashed abroad has started flowing in, prosecution will be executed in some cases, Pranab informed.

The govt is determined to bring down fiscal deficit to 5.1 per cent of GDP next fiscal, FM said.

Reactions on the budget:
The budget aims at faster, equitable, sustainable and more inclusive growth: PM Manmohan Singh.

Balanced budget, finance minister is realistic and practical: Deepak Parikh.

It is a good budget, says Rahul Gandhi.

Salman Khurshid and Chidambaram hail Pranab’s Union Budget.