Budget: Time for action is NOW!

10% surcharge on corporate tax.

The upper ceiling of the sum insured under the mediclaim policy is also to be increased to Rs 0.5 m

All income from UTI and other mutual funds to be fully exempt from income tax.

Cap on long-term capital gains for resident Indians on transfer of shares at 10%.

Law to amend stock options as perquisite at the time of exercise of option by the employee and capital gains at sale of the same.

Interest on housing loan exemption raised to Rs 75,000 from Rs 30,000.

Special excise duty restructuring into 3 slabs.

Appointment of debt recovery tribunal to reduce NPAs.

Implementation of technology upgradation fund for textile units.

Lending to food and agro-processing to be recognised as priority sector lending.

Additional duty on high-speed diesel.

Rs 100 bn to be raised from disinvestment.

Verdict: Positive for stock markets and housing, but short on vision.

Stock market reaction: Down 8.2% in one month.

Key reason for the reaction: Tech meltdown.

Decrease in surcharge on income tax from 17% to 2%. TDS on interest on bank deposits lowered to Rs 2,500 per annum from Rs 10,000 per annum.

Interest income deduction under 80L reduced to Rs 9,000.

Deduction or rebate on insurance premium extended to all insurance companies.

Increase in FII investment limit to 49%.

Dividend tax reduced to 10% from 20%.

Indian companies can invest upto US$ 50 m abroad through the automatic approval route. ADRs/GDRs provided two-way fungibility.

Significant increase in tax incentives for the housing sector. Interest waiver raised to Rs 150,000 per annum.

Special excise duty slab reduced to one slab.

A 150 basis points reduction in administered small savings rate.

Implementation of committee recommendations to control burgeoning expenses. Govt. plans to reduce headcount by 2% each year.

On the labour reforms front, companies employing upto 1,000 employees would have greater freedom in layoff and shutdown.

Verdict: One of the best budgets under the ruling government.

Stock market reaction: Down 15.1% in one month.

Key reason for the reaction: Stock market scam.

Section 88 benefits for individuals earning above Rs 500,000 removed. For person's earnings between Rs 150,000-Rs 500,000, it is 10% (earlier 20%). A 5% security surcharge imposed.

Dividend tax imposed on the hands of the recipients, at individual's tax bracket. Dividend tax applicable for mutual funds also.

Automatic approval limit raised to US$ 100 m.

Incentives maintained

Dismantling of the administered price mechanism for the oil sector.

Administered interest rates reduced by 50 basis points. Rates will be benchmarked against government securities.

Focus on rural infrastructure development (including roads and rural electrification)

Fiscal Responsibility Bill to be introduced.

Peak customs duty reduced from 40% to 35%.

Verdict: Nothing extraordinary. Salaried class affected.

Stock market reaction: Down 2.6% in one month

Key reason for the reaction: Gujarat riots.