BUDGET 2010-2011

BY: ANISH
BHUSHAN
 WHAT IS BUDGET ???
A budget is a list of all planned expenses and
revenues. It is a plan for saving and spending.
A budget is an important concept in
microeconomics, which uses a budget line to
illustrate the trade-offs between two or more
goods. In other terms, a budget is an
organizational plan stated in monetary terms.

Management | CONFIDENTIAL 2010 December 8, 2021

 PURPOSE OF BUDGET
1. Provide a forecast of revenues and expenditures
i.e. construct a model of how our business
might perform financially speaking if certain
strategies, events and plans are carried out.
2. Enable the actual financial operation of the
business to be measured against the forecast.

Management | CONFIDENTIAL 2010 December 8, 2021

 TYPES OF BUDGET
Sales budget: The sales budget is an estimate of future
sales, often broken down into both units and dollars.
It is used to create company sales goals.
Production budget: Product oriented companies create a
production budget which estimates the number of units
that must be manufactured to meet the sales goals.
The production budget also estimates the various
costs involved with manufacturing those units,
including labor and material.
Cash Flow/Cash budget: The cash flow budget is a
prediction of future cash receipts and expenditures
for a particular time period. It usually covers a
period in the short term future. The cash flow budget
helps the business determine when income will be
sufficient to cover expenses and when the company
will need to seek outside financing.
Management | CONFIDENTIAL 2010 December 8, 2021
 CONT…
Marketing budget: The marketing budget is an estimate of
the funds needed for promotion, advertising, and
public relations in order to market the product or
service.
Project budget: The project budget is a prediction of
the costs associated with a particular company
project. These costs include labor, materials, and
other related expenses. The project budget is often
broken down into specific tasks, with task budgets
assigned to each.
Revenue budget: The Revenue Budget consists of revenue
receipts of government and the expenditure met from
these revenues. Tax revenues are made up of taxes and
other duties that the government levies.
Expenditure budget: A budget type which include of
spending data items.

Management | CONFIDENTIAL 2010 December 8, 2021

 CHALLENGES

 The first challenge is to maintain the GDP

growth rate to over 9% p.a. then find the means
to cross the double digit growth barrier

 To address the weaknesses in government

systems, structures and institutions at different
levels of governance.
- PRANAB MUKHERJEE,

FINANCE MINISTER OF INDIA.

Management | CONFIDENTIAL 2010 December 8, 2021
 OVERVIEW OF ECONOMY

 India among the first few countries in the world

to implement major reforms to negate fallout of
the global slowdown.

 The growth rate in manufacturing sector in

December 2009 was 18.5 per cent – the highest
in the past two decades.

Management | CONFIDENTIAL 2010 December 8, 2021

 PEOPLE’S OWNERSHIP & IMPROVING INVESTMENT
ENVIRONMENT
 Government Plans to Raise more than Rs. 25,000
Crs. through Disinvestment of PSUs.

 Methodology for calculation for Indirect Foreign

Direct Investment in Indian Company has been
clarified.

 Granting Additional Banking Licenses to Private

Banks to diversify their operations and provide
more financial infrastructure.

Management | CONFIDENTIAL 2010 December 8, 2021

 Proposed Laws:

 Direct Tax Code (DTC) to be implemented from 1st

April, 2011.

 GST to be rolled out from 1st April, 2011.

 Introduction of pending Companies Bill, 2009 to

replace the existing Companies Act, 1956.

Management | CONFIDENTIAL 2010 December 8, 2021

DIRECT TAXES: Individual (Male)
TAX RATES REVISED SLAB OLD SLAB

10% Rs. 1.60 L- 5.00 L Rs. 1.60L- 3.00L

20% Rs. 5.01 L- 8.00 L Rs. 3.01 L- 5.00 L
30% Above Rs. 8.00 L Above Rs. 5.00 L
Individual (Female)
TAX RATES REVISED SLAB OLD SLAB
10% Rs. 1.90 L- 5.00 L Rs. 1.80L- 3.00L
20% Rs. 5.01 L- 8.00 L Rs. 3.01 L- 5.00 L
30% Above Rs. 8.00 L Above Rs. 5.00 L
Individual-Senior Citizen (Age > 65 Male / Female)
TAX RATES REVISED SLAB OLD SLAB
10% Rs. 2.40 L- 5.00 L Rs. 2.10L- 3.00L
20% Rs. 5.01 L- 8.00 L Rs. 3.01 L- 5.00 L
30% Above Rs. 8.00 L Above Rs. 5.00 L
 DIRECT TAXES (contd.):

Saving in Taxes for Individual (Example)

If Income is Male Female Senior Citizen

Rs. 3.0 L p.a. Nil Rs. 1,030 Rs. 3,090
Rs. 5.0 L p.a. Rs. 20,600 Rs. 21,630 Rs. 23,690
Rs. 10.0 L p.a. Rs. 51,500 Rs. 52,530 Rs. 54,590

Deduction of an additional Investment of Rs. 20,000 in

infrastructure Bond over and above existing limit of Rs.
100,000 (U/s 80 C) is allowed.

Management | CONFIDENTIAL 2010 December 8, 2021

 Direct Taxes (contd.):

 To boost investment in Tourism, Initial Capital Investment in Two-Star hotels

construction is allowed as Deduction from the incomes.

 As one time relief to Housing & Real Estate Sector, extension of additional 1
year has been granted to complete the Projects to avail the deduction.

 Surcharge on Corporate Income Tax has been Reduced to 7.5% from 10%

 Minimum Alternate Tax on Book profits increased to 18% from 15%

 Limit of Tax Audit U/s 44AB enhanced to Rs. 60 L from Rs. 40L.

 Expenses on which, TDS is deducted during the Financial Year will be allowed
as deduction only if TDS is paid before due date of filing of Income Tax Return.

 Delay in payment of TDS will attract Interest @ 18% p.a. Vs. 12% p.a.

Management | CONFIDENTIAL 2010 December 8, 2021

 Direct Taxes (contd.):

Upward increase in threshold limit relating to TDS w.e.f. 1 st Jul, 2010.

Existing
Proposed
Threshold
Section Nature of Payment threshold limit
Limit of
of payment
Payment
Payment to Contractors
194C 30,000 20,000
(for single transaction)
Payment to Contractors
194C 75,000 50,000
(for total transaction during the year)
194H Commission or Brokerage 5,000 2,500
194I Rent 180,000 120,000
Fees for professional or technical
194J 30,000 20,000
services

Management | CONFIDENTIAL 2010 December 8, 2021

 INDIRECT TAXES:

-Excise
 Basic Central Excise Duty on Non Petroleum Products increased
from 8% to 10% Ad Valorem.

 Central Excise Duty on Petrol & Diesel increased by Rs. 1 per liter.

 Proportionate rise in Specific Duty for Cement and Cement clinkers.

 Ad-Valorem Duty on Large cars ,Multi Utility Vehicle increased by

2% to 22%.

 Reduction in Central Excise Duty on corrugated boxes and cartoons

from 8% to 4%.

Management | CONFIDENTIAL 2010 December 8, 2021

 INDIRECT TAXES (Contd.):

-Service Tax
 Service Tax to be paid on residential /
commercial premises to the Builder for
following services:
1. Prime/preferential location charges for a flat/commercial space
according to the choice of the buyer (i.e. Direction- sea facing, park
facing, corner flat; Floor- first floor, top floor, Vastu- having the bed
room in a particular direction; Number- lucky numbers).

2. Internal or external development charges which are collected for

developing/ maintaining parks, laying of sewerage and water
pipelines, providing access roads and common lighting etc;

3. Fire-fighting installation charges; and

4. Power back up charges etc.

Management | CONFIDENTIAL 2010 December 8, 2021
 INDIRECT TAXES (Contd.):

-Service Tax
 Renting of Immovable Property is now specifically
brought into Service Tax net, levy of which was
earlier stayed by an order of Delhi High Court,
w.e.f. 1st July, 2006.
 Transport of Goods by Railway will also be liable
to service tax w.e.f. 01.04.2010 other than exempted
goods @ 3.09% (i.e. 10.3% less 70% abatement)

Management | CONFIDENTIAL 2010 December 8, 2021

 THANK YOU

Management | CONFIDENTIAL 2010 December 8, 2021