Union Budget 2011-12
Insights and Analysis

The Finance Minister of India presented the Union Budget 2011-12 on the 28th of February, comprising of key policy announcements and tax proposals.

This Budget assumes significance as we are at the threshold of global economic recovery coupled with challenges such as maintaining growth momentum, fiscal discipline and at the same time elevated levels of inflation.

The Budget 2011 once again reiterates the Government's commitment in implementing tax reforms - Direct Taxes Code from 01 April 2012, roll out of Goods and Services Tax, review of foreign direct investment policy are some of the big ticket changes on the anvil.

From a tax perspective, levy of minimum alternative taxes on Limited Liability Partnerships and on units in and developers of Special Economic Zones seems a dampener but the reduction in surcharge, increase in weighted deduction on payments to R&D programmes, investment based incentives and use of IT infrastructure to ease the burden of tax compliance, a onetime concessional tax rate of 15% on dividends from foreign subsidiaries provide Industry a reason to cheer.

While tax sops in the form of extension of tax holiday benefit was expected for the IT/services sector, the Government has rightly focused on agriculture, infrastructure and social spending that will result in inclusive and equitable growth.

Click here to download your copy of the Budget 2011 report