In January, gold import duty was hiked from 4% to 6% which impacted on the gold demand and fall in prices.
In this Budget the maximum limit for bringing home gold was raised to Rs 50,000 for men and Rs 1 lakh for women passengers. Earlier, the limits were Rs 10,000 and Rs 20,000 respectively.
The FM also imposed Commodities Transaction Tax( CTT) of 0.01%. CTT is levied on non-agricultural commodities future contracts at the same rate as on equity futures that is at 0.01 percent of the price of the trade.
CTT shall be allowed as deduction if the income from such transaction forms part of business income.
While FM reduced Securities Transaction Tax (STT) on gold exchange traded funds was reduced to 0.001%.
In a move to divert attention from gold the finance minister P Chidambaram announced the proposal to launch inflation-indexed bonds or inflation-indexed national security certificates.
Current Account Deficit (CAD) continues to be the main concern because of our excessive dependence on oil imports, the high volume of coal imports, our passion for gold, and the slow down in exports.