Hyderabad, February 27: Income tax breaks may have saved you some money but surely, it won’t be enough to buy gold! For, the Union Budget giveth and taketh as well. Union Finance Minister Pranab Mukherjee has hiked customs duty on precious metals by a whipping 50 per cent. The customs duty, which was around Rs 200 per 10 grams, will henceforth be Rs 300.
Similarly, the customs duty on silver has been increased from Rs 1,000 per kg to Rs 1,500.
The cost of gold, which is currently hovering in the range of Rs 16,500 to Rs 16,700 per 10 gm, is likely to zoom into hitherto unchartered spheres.
“This (Budget) will have a negative impact on exporters, who procure gold from the market. It will result in additional cost to them in the form of duties,” said one jeweller.
Gold merchants at Somajiguda said prices will certainly go up and demand will be hurt following an increase in import duty. “Import prices on gold and silver will go up. However, this will not affect the demand, since people have seen much higher levels for precious metals,” opined Meena Jewellers, MD, Karan Jethwani.
“Branded jewellery has been exempted but Pranab Mukherjee has increased the duty on gold. So I think overall, for the jewellery sector as such, I don’t think this is a good budget, it is more negative than positive. The duty on gold will affect the industry as a whole as gold prices in India will go up… the industry was expecting customs duties to be scrapped,’’ says Rajesh Mehta, an exporter.
A balancing act
Chartered Accountant NB Kumar has described the increase in income tax slab from Rs 1.6 lakh to Rs 5 lakh as a relief to the salaried class.
Reacting to the budget proposals, he said earlier 10 per cent tax was applicable only to those, whose annual income was between Rs 1.6 lakh and Rs 3 lakh. Now that the slab has been hiked to Rs 5 lakh, more number of employees would stand to benefit. Kumar felt that hiking the limit of turnover to Rs 60 lakh from Rs 40 lakh for income tax audit would help small traders.
He, however, said Union Finance Minister Pranab Mukherjee had given benefits with one hand and took away with another as far as corporate taxation was concnered. Though the corporate surcharge has been decreased from 10 per cent to 7.5 per cent, Minimum Alternate Tax (MAT) has been hiked to 18 per cent from 15 per cent. He also welcomed the waiver of capital gains tax for those who wanted to convert their business into Limited Liability Partnership (LLP).
–Agencies