• Fringe Benefit Tax is completely abolished
• Continued measures of government to boost GDP growth are expected to drive Indian consumerism. This would be positive for the retail sector.
• The threshold limit of exemption in the case of all assesses increased from Rs.150,000 to Rs.160,000. It has been increased from Rs 180,000 to Rs 190,000 in the case of a woman assesses and from Rs 225,000 to Rs 240,000, in the case of a senior citizen.
• No change in the corporate income tax rate.
• Minimum Alternate Tax (MAT) to be increased to 15% of book profits from 10%. The period allowed carrying forward the tax credit under MAT to be extended from seven years to ten years.

• Industry Status: Not granted
• FDI to open for the retail industry: Not granted
• Introduction of 100% tax deduction on expenditure incurred on employment of new workmen and weighted deduction for payment made by retailers towards training and development of their personal: Not granted
• Proposal for GST (goods and service tax) in retail industry: Not granted.

Budget Impact

Most of the industry expectations are not considered. So impact of Union Budget 2009-10 on Retail sector is Neutral.

Scrip to Watch

Pantaloon Retail, Koutons and Vishal Retail

Outlook

The increase in tax limit for men, women and senior citizen may increase in consumption of people, which indirectly boost the retail sector. The sector also welcomes the abolishment of Fringe benefit tax. As the Foreign Direct investment is not allowed in Retail industry may impact the rapid growth in distribution system and modernization of the industry. Overall Union Budget 2009-10 is neutral.