BUDGET SPECIAL 2008-09

Budget 2008-09: Populist yet growth oriented

Given the election year, the finance minister (FM) tabled a populist budget aimed at pleasing a large section of rural population and also the salaried middle class. Apart from the substantial increase in budgetary allocation for rural and social infrastructure, the budget has proposed huge debt waiver and relief worth Rs60,000 crore to farmers. But in spite of the increased expenditure, the fiscal prudence has been maintained with fiscal deficit target set at 2.5% for 2008-09.

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RAILWAY BUDGET SPECIAL

Railway Budget 2008-09

With general elections due next year, the Railway Minister Mr Lalu Prasad tabled a people friendly Railway budget in the Lok Sabha on Tuesday. This budget was marked by good performance on both the freight and the passenger traffic fronts and a continued improvement in the operating ratio. The Railway Minister has attributed this performance to reduced fares/tariffs driving volumes and profits. The Railways continue on its profitable growth path and the accent continues to be on capital expenditure (capex) to make it more competitive.

Other highlights of this budget are reduction in passenger fares by 5% for second-class sleeper trains and reduction of 3-7% in fares for AC classes. The freight rates on petrol and diesel is reduced by 5% (by reducing its classification), whereas the freight on fly ash is cut by 14%. To further gain market share in the freight segment, the minister has taken initiatives like introduction of new wagon leasing policy and bulk and non-bulk goods terminal scheme. The budget also spells out the aim of using the public private partnership (PPP) model to offer door-to-door solutions including value-added services like modern material handling facilities, warehouses and multi-modal logistic parks.

Taxation - Income Tax

PERSONAL INCOME TAX RATES / SLAB 2008-09

For individuals, HUF, Association of Persons (AOP) and Body of individuals (BOI):

For the Assessment Year 2008-09

Taxable income slab (Rs.)	Rate (%)
Up to 1,50,000 Up to 1,80,000 (for women) Up to 2,25,000 (for resident individual of 65 years or above)	NIL
1,50,000 – 3,00,000	10
3,00,001 – 5,00,000	20
5,000,001 upwards	30*

*A surcharge of 10 per cent of the total tax liability is applicable where the total income exceeds Rs 1,000,000.
Note : -

• Education cess is applicable @ 3 per cent on income tax, inclusive of surcharge if there is any.
• A marginal relief may be provided to ensure that the additional IT payable, including surcharge, on excess of income over Rs 1,000,000 is limited to an amount by which the income is more than this mentioned amount.

Tax Calculator 2008

Every income tax assessees to get relief of minimum of Rs 4,000.