By K L Narasimham, CA

NEW DELHI, Feb 28, 2006 : OVERALL, the Budget is conservatively presented with a cautious approach. No major policy changes with no changes in the tax structure or rates.

Briefly the following are the highlights :

1. No changes in the tax rates and structure. No change in the exemption limit.

2. The 1/6 scheme of compulsory filing of returns is abolished. This is effective from the financial year starting April 1, 2006 onwards;

3. Fixed Deposits with Schedules Commercial Banks for a period exceeding 5 years will be eligible for deduction under the overall limit of Rs 100000/- under Section 80C of the IT Act;

4. Donations from anonymous and unexplained sources will be taxed as Income at peak rates in the hands of all charitable institutions excepting religious institutions.

5. Banking Transaction Tax will continue in the present form and context. No changes envisaged.

6. Under the Fringe Benefit Tax regime, it is proposed to reduce the Tour and Travel Expenses from 20% taxable expenditure to 5% taxable expenditure.

7. Expenditure on Free samples and expenditure on Brand Ambassador are exempt from the levy of FBT.

8. Issuing PAN is to be made more flexible.

9. Equity Oriented Schemes both open ended and close ended schemes will be eligible for investment under tax savings schemes.