BUDGET - BMR Advisors

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Name of the Scheme FY 2007-08 FY 2008-09In Rs Billion In Rs BillionDevelopment Fund - XIV scheme - 40National Highway Development Program 108.67 129.66Rajiv Gandhi Grameen Vidyutikaran Yojana - 55Accelerated Power Development andReforms Project - 8National Fund for Transmission and - To beDistribution ReformannouncedIndira Awas Yojana Rs 25,000 / Rs 35,000 /house house (for(for plains) plains)Rs 27,500 / Rs 38,500 /house house(for hills) (for hills)The budget proposals include the following:Income taxEffective tax rate• Corporate tax rate remains unchangedTaxable entity Base rate Rate includingsurcharge / cessDomestic company 30 percent 33.99 percentForeign company 40 percent 42.23 percent• Long term capital gains on listed securities continues to beexempt; gains on unlisted securities taxable at 20 percent• Short term capital gains on listed securities increased from10 to 15 percent; gains on unlisted securities remainunchanged• DDT remains unchanged at 16.995 percent (includingsurcharge and cess)india<strong>BUDGET</strong>200855
Tax holiday• 5 year tax holiday granted to undertakings engaged inoperating and maintaining a hospital in specified areas.Following conditions to be satisfied:– construction to be completed and operations tocommence before March 31, 2013– hospital to have atleast hundred beds– construction to be in accordance with the regulations /bye – laws of the local authority• 100 percent tax holiday granted for a period of 5 years toundertakings engaged in the business of hotel in specifieddistricts having UNESCO declared world heritage sites.The hotel should be constructed and should startfunctioning before March 31, 2013Dividend Distribution Tax (DDT)• Dividend declared by a subsidiary to its parent allowed as adeduction in computing the DDT liability of the parent on itsdividend declaration. Following conditions to be satisfied:– Dividend is received from a subsidiary– DDT has been paid on the incoming dividend– Parent is not a subsidiary of another company• Subsidiary defined to mean a company in which more than50 percent shares are held• This amendment to take effect from April 1, 2008Withholding tax• Contractual payments by Association of Persons and Bodyof Individuals liable to tax withholding under section 194CMAT• In computing book profits, deferred tax debited to the profitand loss account to be added back• Definition of “income tax paid or payable” widened to includeDDT, interest, surcharge and education cess56india<strong>BUDGET</strong>2008
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indiaThought LeadershipBUDGET2008Im
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C O N T E N T SFOREWORDECONOMIC IND
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FOREWORDInfrastructure is the backb
Page 8 and 9: ECONOMIC INDICATORS AT A GLANCEIndi
Page 10 and 11: period of the previous year, regist
Page 12 and 13: GROWTH IN CRUDE PETROLEUM PRODUCTIO
Page 14 and 15: GROWTH IN STEEL PRODUCTION (IN PERC
Page 16 and 17: FY 2007-08 to 139 billion in FY 201
Page 18 and 19: Renewable energy sources which incl
Page 20 and 21: TransmissionDuring the period FY 20
Page 22 and 23: Policy developmentsElectricity (Ame
Page 24 and 25: PROJECTED INVESTMENT IN THE POWER S
Page 26 and 27: AVIATION INFRASTRUCTUREAs India’s
Page 28 and 29: necessary to carry out amendments t
Page 30 and 31: The ACP is designed to provide a fo
Page 32 and 33: estimated cost of Rs 18.08 billion,
Page 34 and 35: is projected to scale up to Rs 869
Page 36 and 37: ROADS AND BRIDGESIndia has one of t
Page 38 and 39: Carriers’ Act, 1865 and would cat
Page 40 and 41: RAILWAYSThe Indian Railways is the
Page 42 and 43: estimated cost of Rs 280 billion•
Page 44 and 45: BUDGET EXPECTATIONS - POWERThe majo
Page 46 and 47: Customs and Excise duty rationaliza
Page 48 and 49: significant cost efficiencies (both
Page 50 and 51: Central sales taxDeclared goods sta
Page 52 and 53: during initial tax holiday years, s
Page 54 and 55: Reduction of customs duty on cold s
Page 56 and 57: Reduction of CST from 3 percent to
Page 60 and 61: • The amendment to take effect fr
Page 62 and 63: from customs duty. However, within
Page 64 and 65: legal right of possession and effec
Page 66 and 67: • Reduction of peak rate of excis
Page 68 and 69: • Supply of tangible goods where
Page 70 and 71: Thus, import of goods for airport d
Page 72 and 73: GLOSSARYAAIACDACPAERAATFATMBCDBIALB
Page 74: www.bmradvisors.comOUR CONTACTSNew
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BUDGET - BMR Advisors

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