Fringe Benefit Tax (FBT) to be abolished

Finance Minister Pranab Mukherjee has announced that Fringe Benefit Tax (FBT) has been abolished.

Income Tax exemption limit Increased in union budget 2009

Watch Highlights of Union Budget 2009 related to Direct Taxation

The commodity transaction tax (CTT) has also been abolished. The Goods and Services Tax (GST) will come into effect from April 01, 2010, Mukherjee said.

The corporate tax also remains unchanged.

He said additional revenue would be mobilised through disinvestment of government equity in public sector undertakings and other steps, but said that interest payment alone would be over Rs three lakh crore largely on account of the burden of stimulus packages announced last year that helped the economy grow by 6.7 per cent.

However, he said that government would have the ownership of banks and insurance companies even as disinvestment takes off while reitereating that state holding in these entities would be at least 51 per cent.

Mukherjee also announced a number of sector specific incentives, particularly for those that promote employment, and announced a hike in provision for flagship schemes like NREGA by 144 per cent to Rs 39,100 crore and said that government would also provide a minimum of Rs 100 a day under the job guarantee scheme.

India Inc largely welcomed the initiative for attaining nine per cent economic growth, but said that areas like Securities Transaction Tax and Minimum Alternate Tax, which Mukherjee proposed to hike from 10 per cent to 15 per cent, should have caught the government’s favourable attention.

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