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Budget 2002-03: What to expect
The Union Budget, to be presented by Finance Minister Yashwant Sinha in Parliament on February 28 may announce the following measures:
The government is likely to extend the benefit of 10-year tax holiday to housing sector in the forthcoming Budget in line with rationalisation of core sector projects last year.
Union Budget 2002-03 is expected to focus on agriculture, the food economy, power and urban infrastructure reforms. Since most of these subjects fall under the states' domain, the government is likely to offer incentives for states, which undertake the reforms.
The government is likely to put an additional five per cent duty on luxury items including cigarettes, liquor and cosmetics to raise funds for free, compulsory education to children between 6-14 years under the Sarva Shiksha Abhiyan (universal education program).
Indian government is examining a proposal by the health ministry to issue tax-free bonds of over Rs 50 billion to fund creation of a health infrastructure throughout the country. The tenure of the bonds would range between seven and 10 years.
India's beleagured power sector may be allowed to raise funds through infrastructure bonds at par with domestic financial institutions in the upcoming Budget. Individuals subscribing to the bonds would be able to enjoy a tax rebate as in the case of infrastructure bonds.
The government is likely to announce a roadmap in the budget to bring all services under the tax net over time and also define an exemption limit based on the turnover of firm. At present all companies have to pay service tax regardless of their turnover.
The government is likely to adopt a three-tier graded customs duty structure in the forthcoming Budget and retain the movement towards a single rate structure.
Besides, the entertainment industry is seeking the same status as enjoyed by the infotech and communication sectors and wants exemption from service taxes, reduction in customs duty for equipment, defined norms for advance tax and setting up of a special anti-piracy fund.
On taxation, however, sharp differences have emerged within the government on three crucial Budget proposals pertaining to the restructuring of income-tax slabs, reduction in corporate tax rate and change in the base Minimum Alternate Tax.
Reuters
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