INITIATIVES IN BUDGET 06:–

-Extension of benefits of section 80C of the Income Tax Act to fixed deposits in banks.Investment in a term deposit for a fixed period of not less than 5 years with any scheduled bank shall be eligible for deduction under section 80C.

-As part of the reforms in the banking sector introduced in 1993-94, Capital was infused in the banks by issue of special securities.The total net capital support by the Government is Rs.228 billion at present.The Govt. proposes to convert these non-tradable special securities into Tradable,SLR Govt.of India dated securities.

-Target of farm credit increased from Rs.1,415 billion in FY 06 to Rs.1,750 billion in FY 2007;target of additional 5 million farmers to banks credit portfolio.

-Banks to credit link an additional 385,000 Self Help Group(SHG) in FY 07.

-Changes in the Fringe Benefit Tax(FBT) structure notably reduction in valuation of benefits in the form of tour and travel,hospitality,and use of hotel boarding and lodging facilities.

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