Budget 2016: Income tax slabs unchanged; relief for small tax payers, first time home buyers from Jaitley

TAX PROPOSAL

1) Relief to small tax payer 

# To lessen burden on individuals with income not exceeding Rs 5 lakh, I propose sealing of tax rebate under sec 87A from Rs 2,000 to Rs 5,000

# People who don't have any houses of their own or don't get house compensation from employers will get a rebate of Rs 24,000 per annum.

# Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses

# Anyone with turnover with over Rs 2 crore there will be presumptive income, increased from Rs 1 crore, which will be big relief for MSME category

# Service tax exemption for construction of affordable housing up to 60 sq. mt. under state and central housing schemes

# Service Tax to be exempted on general insurance schemes under NIRMAYA Scheme

# Excise duty on most tobacco products raised by 10-15%

2) Measures to boost growth and employment --

Corporate tax

# Incentives for new manufacturing companies and small enterprise companies

# New manufacturing companies incorporated on or after March 2016, as proposed to be given an option of being taxed at 25% plus cess plus surcharges

# I propose to lower corporate IT rate for next financial year of relatively small enterprises companies with turnovers not exceeding 5 crore in financial year ending March 2015 to 29% per surcharge

# Start-ups -- 100% exemption from tax on profits for three years. MAT will be applicable for this. 

3) Incentivise Make in India: Propose to make suitable changes in customs and excise duty rates to reduce cost and increase competitiveness in IT, hardware, defence production, textile.

I propose to amend customs act to provide for deferred payment of custom duty for importers & exporters within proven track record: Jaitley

— ANI (@ANI_news) February 29, 2016

 

4) Move towards pension society: Tax treatment should be uniform for defined benefits and defined schemes. Withdrawal of 40% of corpus during retirement will be made tax-free. 

# For first time home buyers: Additional deduction of Rs 50,000  on interest for loans up to Rs 35 lakh for property not exceeding Rs 50 lakh. 

# Dividend -- Dividend of individuals, HUF over Rs 10 lakh will be taxable

# Rate of security transaction tax in auction to be increased from 0.17% to 0.15%

5) Additional resource for clean economy

# Exemptions on environmentally friendly cars to be continued

# Infrastructure cess on LPG cars, cars of higher engine capacity, SUVs

# 1% infra cess on small LPG cars

# Clean energy cess for coal at Rs 400/tonne

6) Reducing litigation: Limited period compliance window for taxpayers to declare undisclosed income. Declarations to have immunity from prosecution 

# Limited tax compliance window from Jun 1 - Sep 30 for declaring undisclosed income at 45% including surcharge and penalties

# Our govt is completely committed to removing black money from the economy,

7) Simplification of taxation:

# To cut multi taxes, propose to abolish 13 cesses levied by various Ministries in which revenue collection is less than Rs 50 crores per year

# I accept suggestion from Rahul Gandhi on providing relief (exemption of duty on braille paper) to differently-abled people

8) Create accountability: 

Propose new dispute resolution scheme

FISCAL SITUATION

# Received conflicting reports about FRMB roadmap from different schools of thought

# Committee to be formed to review FRBM

# Fiscal target in revised estimated -- retained at 3.9% and 3.5% of GDP respectively for FY16 and FY17. Ensured that development agenda has not been compromised.

# Total Rs 19.78 lakh crore expenditure in this budget. Of this Rs 5.5 lakh crore allocated in planned expenditure, and Rs 14.28 lakh crore in unplanned expenditure

# Plan and non-planned expenditure differentiation will be done away with from FY17

 

 

FINANCIAL SECTOR

# Bankruptcy code to be rolled out in FY17, will provide comprehensive resolution mechanism for our economy

# RBI Act 1934 will be amended to provide monetary policy code

# Financial data management system will be set up for data analysts

# To improve retail participation in govt securities

# New derivative products to be developed by Sebi

# Propose amendment of Sebi act 

# Comprehensive framework to deal with CIS schemes

# To support banks, Rs 25,000 crore in budget estimation of 2016-17. If additional capital required, govt will look into it. 

# Banking board bureau will be operational in 2016.

# Privatisation of IDBI has started. Govt may reduce stake below 50%

 

# Planning to develop more new greenfield ports in India

# Rs 800 crore for new ports

AVIATION 

# Action plan for revival of unserved and underserved airports

# 160 airports and airstrips which can be provided for Rs 50-100 crore each

# Will partner with state govt for regional connectivity

# 10 of 25 non-functional airstrips with AAI will be revived

# 8,300 km of Rs 1 lakh crore stalled previously, nearly 85% brought back on track

# India's highest ever motor vehicle production record in 2015.

# Sped up process of road construction. Rs 55000 for roads and highways. topped up by Rs 15000 by NHAI through bonds

# Total investments in roads, including rural Gram Sadak Yojya -- Rs 19,000 crore in 2016-17

# CAPEX on railways -- Total outlay on roads and rail in 2016-17 will be mammoth Rs 2,18,000 crore. 

# To approve 10,000 km to be 2016-17

# Total outlay in infrastructure Rs 2,21,246 crore 

# Passenger traffic -- necessary amendments in motor vehicle act. Enabling ecosystem will be provided for the state. Entrepreneurs will be able to operate buses on routes subject to compliance to norms and standards to push for public transport, to create new jobs, and more

# Small shops should be allowed to remain open seven days a week voluntarily

# Weekly off, working hours of entrepreneurs should be regulated

Skill India mission 

# 1,500 multi-skill training institutions in the country 

# Rs 1,700 crore has been allotted for this

# To skill 1 crore youth over next three years

# Entrepreneurship, training at institutions across the country. 

# 100 model career centres operational by 2017-end. 

 

 

# Stand up India scheme to promote entrepreneurtship in SC/ST and women. Rs 500 crore has been allotted for this purpose. 

# This will benefit 2.5 lakh entrepreneurs

# This must become year of entrepreneurship for SC/ST

 

AGRICULTURE

# Need to give sense of income security to farmers

# Want to double the income of farmers by 2022.

# For agriculture Rs 35,984 crore allotted

# Need to address optimal utilisation of water, new irrigation infra, soil fertility, value addition of farm to markets

# irrigation -- 141 million of mixed cultivated land, only 46% covered in irrigation

# 28.5 million hectres will be brought under irrigation under the govt scheme
AIPB

# These projects need Rs 17,000 crore, and Rs 86,500 crore in next five years 

# Will ensure 23 projects are completed before march 2017

# Dedicated long-term irrigation fund under to be set up under NABARD

# Incentives for pulses production. 

# Access to markets: Unified national market scheme. E-market platform in 585 regulated markets.

# National disaster fund -- special focus on timely flow and adequate funds for farmers 

# 8.5 lakh crore in 2015-16, agricultural credit all time high of Rs 9 lakh crore. 

# to reduce loan repayment burden Rs 15,000 crore towards interest subvention 

# Path-breaking crop insurance scheme -- Rs 5,500 crore 

# To make dairy more remunerative for farmers, four new schemes will be taken up 

# Rs 2.87 lakh crore to Gram Panchayat, jump of 228% compared to previous five years

# Funds allocated -- Rs 80 lakh per gram panchayat and Rs 21 crore per local community

# Urgent need to focus on drought-hit areas. 

SOCIAL HEALTHCARE

LPG 

# Provide LPG connection in name of women in rural households. Rs 2,000 crore allotted for this. 

# Will cover 5 crore households in two years. 

# Will provide rural employment in supply chain of delivering LPG gas. 

# 3,000 stores under PM scheme will be opened in 2016 making quality medicines available at affordable rates. 

 

 

AGRICULTURE

#Need to give sense of income security to farmers

# Want to double income of farmers by 2022.

# For agriculture Rs 35,984 crore allotted

# Need to address optimal utilisation of water, new irrigation infra, soil fertility, value addition of farm to markets

# irrigation -- 141 million of mixed cultivated land, only 46% covered in irrigation

# 28.5 million hectres will be brought under irrigation under the govt scheme
AIPB

# These projects need Rs 17,000 crore, and Rs 86,500 crore in next five years 

# Will ensure 23 projects are completed before march 2017

# Dedicated long term irrigation fund under to be set up under NABARDNABARD

# Incentives for pulses production. 

# Access to markets: Unified national market scheme. E-market platform in 585 regulated markets.

# National disaster fund -- special focus on timely flow and adequate funds for farmers 

# 8.5 lakh crore in 2015-16, agricultural credit all time high of Rs 9 lakh crore. 

# to reduce loan repayment burden Rs 15,000 crore towards interest subventionRs 15,000 crore towards interest subvention

# Path-breaking crop insurance scheme -- Rs 5,500 crore 

# To make dairy more remunerative for farmers, four new schemes will be taken up 

# Rs 2.87 lakh crore to gram panchayat, jump of 228% compared to previous five years

# Funds allocated --  Rs 80 lakh per gram panchayat and Rs 21 crore per local community

# Urgent need to focus on drought hit areas. 

 

# Global slowdown from 3.9% to 3.1 in 2015

# Foreign exchange reserves are at highest ever level at $350 billion

# Will announce increased spending in farming, infrastructure and health

 

#Global economy is in a serious crisis

# Global slowdown from 3.9% to 3.1 in 2015. 

# Global Markets have been battered. Indian markets are strong.

# IMF hailed India as "bright spot". World Economic Forum has said India's growth is "extraordinarily high".

 

Today is #Budget2016 ,to welcome my sand art at #Puribeach in Odisha, india pic.twitter.com/lo11abbprQ

— sudarsan pattnaik (@sudarsansand) February 29, 2016

#MarketUpdate Ten minutes ahead of budget, BSE Sensex at 23,107.11, down 47.19 points or 0.20% lower. 

However, banking stocks are edging higher in the session. SBI stocks up over 4%, Punjab National Bank up over 3%, along with other banking stocks ahead of the budget statement. 

PM Modi and Union Minister Venkaiah Naidu in Parliament #UnionBudget2016 pic.twitter.com/nyTgu2WlcB

— ANI (@ANI_news) February 29, 2016

Ahead of the Union Budget 2016 announcement there are some of the expectations these industries:

1. Banking: Debt recovery of bad debts over Rs 4 lakh crore, infusion of more capital, avoid ratings pressure and more. Read here. 

2. Start-ups: To promote the growth of start-ups in India they expect tax holidays for over 3 years after posting profits, relaxation of investment norms, rationalisation of tax and more. Read more.

3. Consumer Goods: The industry expects a 12.52% increase in food subsidy, roll-out of goods and service tax (GST) which is in line with other Asian countries, check on the prices of pulses, essentials and more. Read more. 

4. Healthcare: They expect the government to spend more on prevent healthcare funds, boosts start-ups, incentives, rationalisation of taxes and more. Read more. 

Copies of #UnionBudget2016 at the Parliament

 

Nothing except 'platitude' should be expected from the General Budget 2016-2017.

"The way our economy is, everybody knows that except for platitude, nothing is going to happen in this budget. Rather than making wild announcements on the radio, the Prime Minister should give a direction to the economic policy to see how we can come out of the mess that his own government has created," Congress leader Sandeep Dikshit told ANI.

FM Arun Jaitley and MoS Jayant Sinha met President Pranab Mukherjee for customary briefing on #UnionBudget2016

Ahead of the announcement of the Union Budget 2016 here are some the expectations from various groups in India -

1. Salaried employees: People expect rise in income tax slab, revision of investment limit, rise in the tax exemption limit for medical costs, and more. Read more. 

2. Working women: Some of their expectations include tax exemptions for day-care expenses, exemptions for employing house help, higher tax exemptions for single working women and more. Read more. 

3. Business community: They expect to see a reduction in the corporate tax, simplification of tax laws, lower costs of doing business and more. Read more.

4. Common man: They expect the Finance Minister to reduce the price of essential commodities. Keep a check on the rising prices of subsidised LPG cylinders. Read more.

Markets choppy ahead of Union Budget 2016

BSE Sensex opened slightly down on Monday, tracking weakness in the Asian markets and ahead of the Budget 2016 statement from Finance Minister Arun Jaitley.

In the domestic scenario, Jaitley is slated to announce his second budget statement in the Parliament on Monday at 1100 hours. Ahead of that, the markets were cautious, trading down 26.40 points at Rs 23,127.90, or 0.11% down. 

We have worked very hard on Budget-2016, under guidance of PM and FM Arun Jaitley: Jayant Sinha, MoS Finance

WATCH: Finance Minister Arun Jaitley and MoS Jayant Sinha at North Block #Budget2016https://t.co/FwLKluYv4O

— ANI (@ANI_news) February 29, 2016