New Delhi, Feb 28: Jaswant Singh presented his maiden Union Budget 2003-04 in the Parliament today. This year`s Budget includes a host of sops for the common-man including elimination of five per cent surcharge on personal income tax, tax relief for senior citizens and persons with physical disabilities. Following are the highlights of the Union Budget 2003-04:
Economy and Growth
  • GDP growth 4.4 per cent in 2002-03 despite farm growth fall by 3.1%

  • Industry grows by 6%, services 7% and exports by 20.4%

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  • Gross domestic savings as portion of GDP at 34%

  • Forex reserve build up highest ever at $ 75.5 billion in February

  • Govt prepaid $ 3 billion in external loans to World Bank and ADB

  • Growth to sustain fiscal consolidation necessary

  • 2002-03 external debt interest payments Rs 1156.53 billion

  • 2002-03 external debt interest payments 48.8% of revenue

  • 2003-04 net market borrowing seen at Rs 1.072 trillion

  • 2002-03 net market borrowing revised to Rs 1.182 trillion

  • 2002-03 fiscal gap revised to 5.9% of GDP instead of 5.3% target

  • 2003-04 fiscal gap seen at 5.6% of GDP

    • What’s in for the middle class:
  • Income tax slabs and rates to remain same.

  • 10% surcharge to be imposed on income slab above 8, 50, 000.

  • Income Tax interest deduction on housing loans upto Rs 1,50,000 for self-occupied houses to continue.

  • Government retains 80 L tax exemption limit of Rs 15,000/-

  • 5% surcharge on income tax to be removed

  • Leave Travel Allowance of government employees restored

  • Govt to cut interest rate on small savings schemes by 1%

  • Govt to cut interest rate on PPF rate by 1%

  • UTI-I exempt from Dividend Distribution Tax

  • Varishtha Pension Bima Yojana to be launched by the Life Insurance Corporation of India with an annual return of 9 per cent for senior citizens

  • Rs 1,53,000 tax free income for senior citizens

  • Standard deduction for income tax for salaried class raised to Rs 30, 000 for income upto Rs 5, 00, 000 pa

  • Standard deduction for income tax for salaried class raised to Rs 20, 000 for income above Rs 5,00,000 pa

    • For the poor:
  • Rs 100 per annum government contribution to BPL families premium for health insurance

  • First phase of insurance for very poor to cover five million

    • Corporate Tax:

  • Corporate Tax rate unchanged

  • Government halves corporate tax surcharge

  • 5% Dividend Distribution Tax for companies

  • 12.5% Dividend Distribution Tax on domestic companies

  • Equity funds exempt from Dividend Distribution Tax

  • Tax exemption for R&D companies set up till March 04

  • Capital gains tax scrapped for shares listed after April 01

  • Dividend tax scrapped for investors

  • Merger with state owned banks to get Section 72A tax benefits

  • 5% surcharge for security of India to be halved on corporate tax
    • Bureau Report