| 26 Feb 2010, 1220 hrs IST Giving a relief to the middle class Pranab Mukherjee revised the tax slabs for the next fiscal. Income Tax Ready Reckoner |
| 26 Feb 2010, 1233 hrs IST The FM has slapped an excise duty of Re1/l on petrol and diesel. This has led to a ruckus in the parliament. |
| 26 Feb 2010, 1324 hrs IST The ways in which FM has cut the deficit down to 5.5% is expenditure compression, especially non-plan expenditure with only a 6% increase (adjusted for inflation) is hardly anything. |
| 26 Feb 2010, 1448 hrs IST Small and mid-size outsourcing companies function from STPI units and tax benefits under the STPI scheme are getting phased out in 2010-11. |
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Market gives thumbs up to Budget
MUMBAI: The market was pleased with Finance Minister’s Budget speech driving equity benchmarks sharply higher in afternoon
trade.
Speaking in parliament, Pranab Mukjerjee said he had laid down a road map for reducing the country's fiscal deficit, which soared to a 16-year high of 6.9 per cent of economic output.
The shortfall would drop to 5.5 per cent in the next fiscal year to March 2011, and then 4.8 per cent in the following 12 months, though there would be no let up in the left-leaning government's focus on huge social programmes.
The Finance Minister also slapped an excise duty of Re 1 per litre on petrol and diesel. This has led to a ruckus in the parliament as the move would accentuate inflationary situation in the country. Some opposition members walked out of the house in protest.
National Stock Exchange’s Nifty surged 2.28 per cent or 110.75 points to 4970.50from its previous close. The index touched a high of 4992 during the course of the Budget proceedings after opening at a low of 4858.45.
Bombay Stock Exchange’s Sensex was at 16,604.95, higher by 350.75 points or 2.16 per cent. The index rose to a high of 16,669.25 from a low of 16,249.67.
The broader market also participated in the rally. The BSE Midcap Index surged 2.06 per cent and BSE Smallcap Index gained 1.65 per cent.
Sectorwise, the BSE Auto Index advanced 3.99 per cent, followed by BSE Realty which gained 3.71 per cent. BSE Bankex rallied 3.09 per cent and BSE Metal Index rose 2.89 per cent. The BSE IT Index, marginally down 0.25 per cent, was the lone laggard.
Biggest Nifty gainers were Reliance Capital (11.19%), IDFC (7.4%), DLF (7.29%), Tata Motors (5.71%) and Unitech (5.26%).
Tata Power (-4.34%), Ranbaxy Laboratories (-2.6%), HCL Technologies (-1.65%), BPCL (-0.57%) and Infosys Technologies (-0.47%) were trading with losses.
Market breadth on BSE was extremely positive with 1913 advances against 768 declines.
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Sensex cheers Union Budget 2010; auto, metals, banks lead
The benchmark Sensex salutes Union Budget 2010 unveiled by Finance Minister Pranab Mukherjee and rallied over 400 points during the day. Experts say it was a effect of short covering and positive reaction to budget. Technical Analyst, Ashwani Gujral said it’s just a short covering, so those who are long should exit. However, he feels impact of budget is over and the markets will react to the global cues.
Samir Arora of Helios Capital said the markets rallied due to low expectations from the budget. The markets will get back to global cues next week, he says.
The Nifty closed above the 4900 mark but the sell-off and profit booking in ITC on hike in excise, BHEL, Tata Power, TCS, Infosys and ABB erased more than 50% gains from day's high. Even heavyweights came off their day's high on profit booking at higher levels. It seemed that the markets discouted the budget.
Pranab Mukherjee in his second budget announced some positives like gradual reduction in fiscal deficit, cut in surcharge, more allocation for infrastructure development, increase in FY11 divestment target, increase in personal tax slab to Rs 8 lakh etc, which all these pushed the Nifty above 4950 level during the day. However, there were some negatives like hike in excise duties etc.
FM has increased tax slabs for Aam Adami, so that spending will increase. For income upto Rs 1.60 lakh, there will be no tax while there will be 10% tad for income between Rs 1.60 lakh to Rs 5 lakh; 20% tax for income between Rs 5 lakh to Rs 8 lakh and for income above Rs 8 lakh, there will be tax of 30%.
This will result into an increase in the disposable income of individuals and will boost the spending on necessary as well as luxury goods. Homi P Ranina, Tax Expert, says increase in the exemption limits is on expected lines. According to him, a person earning up to Rs 8 lakh will save Rs 54,000 a year by way of taxes.
The 30-share BSE Sensex closed at 16438, up 184 points and the Nifty was at 4922, up 62 points, as per provisional data. The Nifty March Future was trading with 14 points premium.
