Pay more for porsche rides, puffs & phones
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You will now have to shell out more for smartphones, eating out in air-conditioned restaurants, imported cars and motorcycles, cigarettes and sports utility vehicles, with the finance minister deciding to impose higher taxes on these items. However, branded apparel will cost less while the prices of textile floor coverings of coir and jute will come down further as they have been exempted from excise duty.
If you love jewellery, this should make you happy. Female passengers can bring in duty-free gold items (up to a value of R1 lakh), provided they have stayed out of India for more than a year.
There is good news for home buyers too. First-time buyers will now get an additional deduction of interest of R1 lakh for home loans above R25 lakh and R1.5 lakh for loans up to R25 lakh. This will be over and above the R1-lakh deduction allowed for self-occupation.
Posh rides go expensive: Targeting the affluent class that consumes imported luxury goods, Chidambaram said, "I am sure they will not mind paying a little more." Basic customs duty on new passenger cars and other motor vehicles (high-end cars) costing more than $40,000, with engine capacity exceeding 3,000 cc for petrol-run vehicles and exceeding 2,500 cc for diesel-run vehicles, has been hiked to 100% from 75%. Duty on yachts and similar vessels has also been raised to 25% from 10%.
The move has left auto firms unhappy. "This spells tough times for the automotive industry. The 100% import duty on luxury cars will send out a bad signal to the international market," said Suhas Kadlaskar, director, corporate affairs & human resources, Mercedes Benz.
Costly puff: Smokers will feel the pinch as the excise duty on cigarettes has been hiked by 18%. "What does a finance minister turn to when he requires resources? The answer is cigarettes," said Chidambaram. While ITC India, a leading cigarette maker, did not comment on the hike, experts dubbed it as a regressive move. "We were disappointed that cigarettes, which represent only 15% of the total tobacco consumption, were singled out for this steep increase of 18% in excise duty rates. It will further incentivise the rapidly growing illicit trade," said Udayan Lall, director, Tobacco Institute of India.