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Threshold limit of exemption from personal income tax in the case of all assesses increased to Rs.150,000.

The slabs and rates of tax are :

Up to Rs.150,000                                                  NIL
Rs.150,001 to Rs.300,000                                     10 per cent
Rs.300,001 to Rs.500,000                                     20 per cent
Rs.500,001 and above                                          30 per cent

In case of a woman assessee, the threshold limit increased from Rs.145,000 to Rs.180,000  

In case of senior citizens, the threshold limit increased from Rs.195,000 toRs.225,000 

No change in the corporate income tax rates.
No change in the rate of surcharge. 

Senior Citizen Saving Scheme 2004 and the Post Office Time Deposit Account added to the basket of saving instruments under Section 80C of the Income Tax Act.

Additional deduction of Rs.15,000 allowed under Section 80D to an individual paying medical insurance premium for his/her parent or parents.

Benefit of amortization of certain preliminary expenses under Section 35D allowed to assessee in the services sector. Corporate debt instruments issued in demat form and listed on recognized stock exchanges exempted from TDS.   

Crèche facilities, sponsorship of an employee-sportsperson, organizing sports events for employees and guest houses excluded from the purview of FBT. 

Parent company allowed to set off the dividend received from its subsidiary company against dividend distributed by the parent company provided that the dividend received has suffered DDT and the parent company is not a subsidiary of another company. 

Insert a new sub-section (11C) in Section 80-IB to grant a five year tax holiday to hospitals located in any place outside the urban agglomerations especially in tier-2 and tier-3 towns; this window will be open for the period April 1, 2008 to March 31, 2013. 

Five year holiday from income tax being granted to two, three or four star hotels established in specified districts having UNESCO-declared ‘World Heritage Sites’; the hotel should be constructed and start functioning during the period April 1, 2008 to March 31, 2013. 

Rate of tax on short term capital gains under Section 111A & Section 115AD increased to 15 per cent. 

STT paid to be treated like any other deductible expenditure against business income 

Levy of STT, in the case of options to be only on premium, where the option is not exercised; liability to be on the seller; where the option is exercised, levy to be on the settlement price and the liability on the buyer; no change in the present rates. 

Commodities Transaction Tax (CTT) to be introduced on the same lines as STT on options and futures. 

Banking Cash Transaction Tax (BCTT) being withdrawn with effect fromApril 1, 2009. 

CST

Central Sales Tax rate being reduced from 3 per cent to 2 per cent from April 1, 2008.

Indian Market News Budget 2008, India Budget

Customs duties

1. No change in the peak rate of customs duty. 
2. Customs duty to be reduced from 10 per cent to 5 per cent on certain specified life saving drugs and on the bulk drugs used for the manufacture of such drugs. They are also being exempted from excise duty or countervailing duty. 
3. Specified parts of set top boxes and specified raw materials for use in the IT/electronic hardware industry to be exempted from customs duty. 
4. Customs duty on convergence products to be reduced from 10 per cent to 5 per cent to establish parity between devices used in the information/ communication sector and the entertainment sector   

Excise duty

1. General CENVAT rate on all goods reduced from 16 per cent to 14 per cent to give a stimulus to the manufacturing sector. 
2. Excise duty reduced on small cars from 16 per cent to 12 per cent and on hybrid cars from 24 per cent to the general revised rate of 14 per cent. 
3. Excise duty reduced on two wheelers and three wheelers from 16 per cent to 12 per cent. 
4. Excise duty is to be reduced from 16 per cent to nil on a few mass consumption items including composting machines, wireless data cards, packaged coconut water, tea and coffee mixes, and puffed rice. 
5. Excise duty being exempted on end-use basis, on refrigeration equipment (consisting of compressor, condenser units, evaporator, etc) above 2 TR (tone refrigeration) utilizing power of 50 KW and above. 
6. Excise duty being increased on packaged software from 8 per cent to 12 per cent, bringing at par with customized software attracting a service tax of 12 per cent.   

Service tax

1. Four services brought under service tax net namely,
   1. asset management service provided under ULIP,
   2. services provided by stock/commodity exchanges and clearing houses;   
   3. right to use goods, in cases where VAT is not payable;
   4. Customized software, to bring it on par with packaged software and other IT services.
2. Threshold limit of exemption for small service providers increased from Rs.8 lakhs per year to Rs.10 lakh per year.

Indian Market News Budget 2008, India Budget, Indirect Taxes