Taking into account the overwhelming reaction of general public
against some of the measures proposed in the Finance Bill 2002. The Finance Minister Shri
Yashwant Sinha was good enough to announce in the parliament the followings :
The tax rebate under section 88 for incomes between Rs 1.5 lakh and Rs.5 lakh has been
raised to 15 per cent in place of 10% as propsed. The ceiling is also proposed to be
raised from Rs.80,000/- to Rs.1,00,000/-.
Spares and accessories of bicycles, handpumps and umbrellas will be exempted from from 4
per cent excise duty.
There will not be inland air travel tax to Andaman and Nicobar islands, Lakshadweep and
Leh.
The Excise duty of 4% on pre-recorded cassettes is proposed to be withdrawn to curb
piracy.
The criterion of telephone subscribers to file income tax returns under one by six
scheme is proposed to be removed. However this does not apply to cellular phones.
100 per cent tax holiday for Special Economic Zone units that have come up from April
one. 100 per cent tax holiday would be available for five years from the date of
commencement of production and 50 per cent concession for the subsequent two years.
The tax would be deducted at source "only if the amount received from the company
or the mutual fund exceeds Rs 1,000". Any income above 1,000 rupees would be subject
to tax deduction at source at the rate of 10 percent.
The ceiling of Rs 2 lakh is being lifted for investment by retired employees of both
public and private sector in tax-free government relief bonds which carry an interest rate
of eight per cent.
The customs duty on dairy products is raised from 30 per cent to 40 per cent, which is
the maximum available under WTO bound rate.
Deduction u/s. 80 L will be allowed upto Rs.9000/- includes Mutual Fund Income.
The exemption from 4 per cent duty will include waste and scrap arising in the course of
manufacture of items that attract this duty.
The 4 per cent excise duty on roofing tiles is proposed to be withdrawn.
Under the special package for textiles industry, the Finance Minister proposed to
include padding (including back filling), damping and flanellete raising in the list of
exempted processes even if carried on with the aid of power.
The rate of excise duty will be reduced on hand processed cotton fabrics processed by
independent processors using open air stenters from 12 to 8 per cent. The cotton waste
yarn (up to 2 counts) cleared in hank will be exempted from this duty.
The benefit of small scale sector excise duty exemption scheme will be extended to both
granite as well as marble.
The benefit of excise duty exemption scheme will also be extended to Bengal Lights.
Aviation gas (fuel) will be exempted from special excise duty to reduce the cost of
training of pilots in the country.
Service tax on Life Insurance premium has been removed accepting the premium payable for
risk.
