The Union budget 2010 brought smiles on the faces of millions of Indians and has now evaporated from the regular discussion table. Only some add patches of discourse can be noticed in terms of select seminars, workshop and online analysis.

The art of budget making is actually all about making the first impression as mind-gripping and positive as it could get. This is what happened in this budget. While the opposition walked off , the entire budget speech raced through bumper free house. Most TV viewers also missed what they wanted to really hear about in the budget.

The Service tax is considered to be the winner for a common man in this year’s budget.

Various concessions and preferences have been offered which are considered as the ambidexterity of the Finance Minister by some people, while the other lot may term it as unfair and non-transparent methods of policy making as too many retrospective amendments have been made to prevail over some inconvenient judicial pronouncements. But if you think practically, there is no end to such debates.

A few most interesting feature of this includes ‘The Macro Economic Framework Statement’ and ‘Implementation of Budget Announcements’.

A tax expenditure budget statement was laid before Parliament for the first time during Budget 2006-07 which lent credence to the Government’s intention of bringing about transparency in the matter of tax policy and tax expenditures. It was decided to be made as an integral part of budget documents, encouraged by the pleasant response. And thus it is the fifth such statement which has been laid in the house this year.

An amendment has been cleared by the centre whose logical conclusion is expected to exempt private sector employees’ gratuity up to Rs 10 lakh from income tax. Currently gratuity below Rs. 3.5 lakh is exempted from the tax. Companies can pay higher amount but income tax will have to be paid on the sum above Rs 3.5 lakh.

The union cabinet cleared the proposal to raise the ceiling for payment of gratuity to private sector employees from Rs 3.5 lakh to Rs 10 lakh.

According to the Union labour minister Mallikarjun Kharge, the cabinet bill has approved the bill seeking to amend the Payment of Gratuity Act which will be introduced in the current session of Parliament. However the minister did not disclose when the income tax would be amended.

The Finance ministry has decided that there will be another round of restructuring of income tax slabs after the direct taxes code comes into effect from April 2011.

Finance Minister Pranab Mukherjee has widened the slabs in his budget proposal for 2010-11. The new tax code suggests a 10 per cent tax on income between Rs 1.6 lakh and Rs 10 lakh, 20 per cent on income up to Rs 25 lakh and 30 per cent on income beyond that.

However, according to revenue secretary, Sunil Mitra a further widening of tax slabs is possible but it will see the light of the day when the revised (draft direct taxes code) paper comes. The finance ministry will come out with the revised draft in the first quarter of the next fiscal so that a bill can be tabled in the monsoon session of Parliament.

It has been so following a number of grievances on draft direct taxes code proposed by the finance ministry currently.

The finance minister stated that the period is going to be between April and June as this is the time when the ministry has time for this purpose.

The Finance Minister walked a tightrope while delivering his Budget speech this year. His aim was to keep up the growth momentum while keeping the fiscal deficit and inflation situation under control at the same time.

While he continued to show clear signals of the government’s commitment to push for a simplified and easy tax system, his commitment to roll out the two most important fiscal legislation, the direct tax code and the goods and services tax (GST) regime was clearly manifested in the Budget speech.

Corporate Surcharge: The budget proposed a reduction in the corporate surcharge from 10% 7.5%. The impact may be small but it is considered to be a step in the right direction in order to bring in a simplified and single tax regime.

Individual tax slabs: A very liberal tax slabs has been proposed for individuals. While those having an income up to Rs 10 lakh will attract 10% tax, the highest tax slab of 30% will be only for those whose taxable income will cross Rs 25 lakh.

Minimum alternate tax: An asset-based tax has been proposed by the tax code, which has widely been criticized by all the sections of the industry. Although there is no specific reference to assest-based tax, the Budget enhances the MAT rate from 15% (plus surcharge) to 18% (plus surcharge), signaling to some extent a continuity bias for profit-based MAT.

A private research committee has come out with a review report on Union Budget 2010-11. According to the research firm the most important reform in the budget has been concessions on personal income tax, which will release significant amounts for discretionary spending.

The report estimated an average savings of Rs. 56,000 for an income earner of Rs. 0.8 million per annum. This move will enhance the demand for autos, real estate and various savings products.

The report assumed the Union budget 2010-11 to be a challenging event, given the balance that was required between lowering deficit and providing growth catalysts to the economy. While the fiscal deficit has been curbed at 5.5% for FY11, growth catalysts have been provided with further sops for private consumption.

While the whole nation is going gaga over the 2010 budget presented by Finance Minister Pranab Mukherjee, it seems that Finance Minister forgot to mention anything for the welfare of the poor section in the society.

With the country’s more than half of the population embroiled in abject poverty and more than ninety five percent people spending their lives under great financial stress, the 2010 budget seems to have been made keeping in mind the welfare of the five percent upper cast crest of the society under its lenses.

The budget has nothing to offer to the poor section of the society.

Highlights of the Budget

Income Tax- Personal Income Tax slabs widened

Additional points

• Contribution under central scheme to be included for Health Insurance exemption.
• Deduction of Rs 20,000 in long term infrastructure bonds.
• Income Tax Department ready with Saral-2 form for salaried tax-payers.
• Revamp needed of internal working system.
• 2,000 Income Tax Returns daily.
• Revamp needed of internal working system.
• Professionals with Rs 15 lakh income need account audit.
• One percent interest subsidy on home loan up to Rs 10 lakh March 2011.
• Interest on tax deduction, not paid, raised to 18%.

According to the government, the tax proposals introduced by Finance Minister, Pranab Mukherjee in his budget for 2010-11 might fuel inflation, marginally.  However, it would not put any pressure on the interest rates.

When asked if the increase in inflation would put pressure on the interest rates, finance secretary Ashok Chawla assured that there is no chance of pressure on the interest rate from fuel hike. In the words of Finance Minister, Pranab Mukherjee, from February, the hike in the petroleum prices would lead to 0.41 per cent hike in inflation.

He was also of the opinion that RBI is fully aware of the requirement of the industry and the crucial interest rates have been allowed to remain unaffected for quite some time.

Indian finance minister, Pranab Mukherjee presented the Union Budget for 2010 in the parliament. The highlights of the budget were Income Tax Relief, rise in welfare schemes and remarkable earmarking for infrastructural development.

While presenting the budget, Mukherjee stated that the worst of financial slump was over and ongoing condition promised high and inclusive growth in the coming years.

Individual tax payers felt comforted as the minister offered a remarkable relief in various tax slabs. No tax up to Rs. 160,000, 10 percent for up to Rs. 500,000, 20 percent for up to Rs. 800,000 and 30 percent for higher income.

According to the finance minister, the proposal to reduce the tax slab will benefit 60 percent of all tax payers.

Interested in the knowing the amount your neighbor pays as his income tax? Just file an RTI. The Central Information Commission has ruled out that seeking information on income tax is not invasion of privacy, in a move aimed at curbing tax evasion.

According to CIC Shailesh Gandhi, the concept of ‘privacy’ is a cultural notion which is looked differently by different societies. He denied that the disclosure of information would lead to unwarranted invasion of the privacy of the individual.

In his order CIC expressed that Parliament has not codified the right to privacy so far, therefore in balancing the Right to Information of Citizens and the Individual’s Right to Privacy, the Citizen’s Right to Information would be given greater weightage.

The CIC’s order came only after Rakesh Kumar Gupta of Delhi filed an application seeking all records available with the IT department including assessment records of all levels with regard to Escorts Limited included Escorts Heart Institute and Research Centre (Chandigarh and Delhi).