India Union Budget 2005 – Gainers and Losers

Gainers

• ACs, tyres to become cheaper as excise duty on air conditioners, tyres goes down from 24% to 16%.

• Imported DVDs, plasma TVs and top end audio systems will be less expensive as peak custom duties go down

• Import duties on PCs and some IT product brought down to nil but CVD is of 4%

• Telecom equipment makers stand to gain

• Pasteries, cakes get cheaper

Gainers

• ACs, tyres to become cheaper as excise duty on air conditioners, tyres goes down from 24% to 16%.

• Imported DVDs, plasma TVs and top end audio systems will be less expensive as peak custom duties go down

• Import duties on PCs and some IT product brought down to nil but CVD is of 4%

• Telecom equipment makers stand to gain

• Pasteries, cakes get cheaper

• Tea is also a gainer as Re 1 surcharge per kg of tea is gone

• Refined vegetable oil and vanaspati price will fall due to cut in excise duty

• Clothes will be cheaper owing to reduction customs and excise duties

• Footwear prices, medicines prices to fall because of reduction in customs duty on machinery

• Tax rates cut will induce more spending so boom time for producers

• Salaried class to gain as savings upto 1 lakh will be deducted before calculating income tax. Savings will also receive a boost due to it

• Women, senior citizen get a gentle touch in income tax slabs with exemption limit of 1.25 and 1.5 lakhs respectively

• Rural India stands to gain under ‘Bharat Nirmaan’ scheme

• Emphasis on infrastructure will keep India Inc happy

• Textile, sugar industry received a boost

• RBI to get more freedom on drawing up monetary policy after removal of statutory limits on CRR and SLR

• Mumbai to become a regional financial hub is an important aspect of the budget

• Overall Capital friendly budget

• LPG and subsidized kerosene will gain as excise duty cut to zero

• IIS Banglore gets a 100 crore surprise to become a world class university

• Mobile removed from income tax criterion

• Focus on rural children health and education

Losers

• Home buyers as service tax will be levied on construction of residential complex

• Cigarettes consumers as additional surcharge is levied on tobaccor products and pan masala

• Consumers may have to bear the burden of hiked excise duty on iron and steel as cars home applicance may cost more

• Rise in securities transaction tax will make stock exchange market transactions more expensive

• Banks will have administrative nightmare with number of transactions going up following a tax on withdrawals crossing Rs 10,000

• Those whose Electricity bills exceeds Rs 50,000 annually will have to pay income tax

Those who left untouched and will wait for the next budget are:

• Carmakers and aerated soft drink makers saw no relief as exice duty remain fixed at 24%

• Pharmaceuticals industry- no special concession given on R&D expenditure

• Insurance sector-no mention of increasing FDI in insurance sector

• Foreign companies as no change in tax rates and surcharge for foreign companies

• Power sector reforms and water management not given enough attention