HIGHLIGHTS OF UNION BUDGET 2016
A. issues
related to income tax:-
-No change in Income
Tax slabs
-First time home buyer
– Rs 50,000 deduction for upto Rs 35 lakh loan provided house cost no more than
Rs 50 lakh
-Reduction of Rs
60,000 per annum for those who don’t own house and pay rent
-Penalty to be 50% of
tax in income under-reporting cases, 200% in misreporting of facts
-National Pension
scheme – withdrawal of 40% of corpus at time of retirement tax exempt
-Tax rebate for those
earning less than 5 lakh per annum
-Under 5 lakh income –
rebate increased from 2000 to 5000
-Corporate Tax – New manufacturing
companies registered on/post March 01, 2016 – option of tax 25% surcharge +
cess
-Lower Corporate tax
for small companies at 29% surcharge + cess
-New grading system of
imposing penalties - on the basis of under reporting or concealment of income
-Scope of e-assessment
to be expanded to 7 mega cities
-Income tax department
will expand e-sahyog to assist small taxpayers
-Income tax dept. will
expand e-sahyog to assist small taxpayers:
-Start-ups to get 100%
tax exemption for 3 years except MAT which will apply from April 2016-2019
-Levy of heavy penalty
for nonpayment of tax has led to high litigation. Proposal to modify scheme for
penalties
-Tax arrears can be
paid in lieu of interest liabilities in retrospective taxation cases
-Monetary limit for
cases to be decided by 1-member bench up from 15 lakh to 50 lakhs
-Incentives for new
manufacturing companies and smaller enterprise companies
-11 new benches of tax
tribunals to be established to reduce pendency
-Companies Act to
amended for ease of doing business; to enable registration of companies in a
day
-15% surcharge on
income tax for those with incomes exceeding 1 crore pa
-I propose to lower
corporate IT rate for next financial yr of relatively small enterprises
companies with turnovers not exceeding 5cr
-Krishi Kalyan Cess of
0.5% on all taxable services
-Tax evasion will be
countered strongly:
-10% dividend on
earnings over earnings over 10 lakhs
-Presumptive income
tax scheme to be extended to all professionals with income of Rs 50 lakh with a
presumption of 50 percent profit.
-Limited tax
compliance window from Jun 1 - Sep 30 2016 for declaring undisclosed income at
45% including surcharge and penalties. There shall be no scrutiny or
prosecution in this regard
-Clean energy cess
increased from RS 200 per tonnne to 400 per tonnne on coal, lignite and peat
-Move towards a low
tax regime with non litigious approach
-Committed to provide
a stable and predictable taxation regime
-PM Awas Yojna: 100%
deduction for profits of undertakings from housing projects in cities during
June 2016 - March 2019
-MAT will apply for
such undertakings
-Incentives for new
manufacturing companies and smaller enterprise companies
-Hike in to limit from
1 to 2 crore on small business assess in MSME category.
-Presumptive income of
8% Committed to increase investment in asset reconstruction companies
-Incentives for new
manufacturing companies and relatively small enterprise companies
-Committed to
implementing GAAR from April 1, 2017
-Presumptive income
tax scheme to be extended to all professionals with income of Rs 50 lakh with a
presumption of 50 percent profit.
-Accelerated
depreciation to be limited to 40% wef from Apr 1, 2017
-Relief to those who
living on rent - Rent deduction raised from Rs 24,000 to Rs 60,000
-Tax ceiling has been
raised from 2000 to 5000 rupees for those earning less than Rs 5 lakh rupees p.a.
B. issues
related to INDIRECT TAXES :-
-Excise duty on
Tobacco products increased by 10-15%
-Service tax exempted
for housing construction of houses less than 60 sq meters
-Service tax on single
premium annuity to be reduced to 1.5 percent from 3.5 percent.
-Suitable changes to
be made in customs and excise duty rates to improve competitiveness and boost
Make In India
-Service tax exempted
for general insurance schemes under Niramayi Swasthya Bima Yojana
C. issues related to Social sector:-
-Direct benefit
transfer scheme will be implemented for disbursal of fertilizer subsidy on a
pilot basis
-Govt stands firmly
behind public sector banks, Rs 25k crore for bank recapitalization
-Govt will enact
necessary amendments in the Motor Vehicles Act and open up the road transport
sector in passenger segment
-Task force has been
constituted to rationalize the human resources in various ministries has been
instituted
-AADHAR NO will not be
a proof of citizenship or domicile
-Retail trade is
largest service sector employer in country. Many more jobs are created in this,
provided the regulations are simplified:
-Shops will be given
an option to remain open on all seven days
D. issues related to
INFRASTRUCTURE Sector:-
-Public Utility
Resolution of Disputes Bill for resolution of disputes in infra sector
-Guidelines of renegotiating
PPP contracts will be introduced
-New credit rating
system for infrastructure
-Considering
incentivizing gas production from deep sea, ultra deep water and high temp.
areas
-3000 crore rupees
earmarked for nuclear power generation
-100% FDI through FAPB
route in marketing of food products produced and manufactured in India
-Will encourage CPSEs
to sell their assets like land
-Dept of Disinvestment
to be renamed as Dept. of Investment and Public Asset Management
-Shops will be given
an option to remain open on all seven days
-85% of stalled road
projects back on track
-Total of Rs 97000
crore will be spend on roads and highways
-Rs 218000 crore
investment in roads and railways in 2016-17
-10000 kms of national
highways in 2016-17
-Additional 50000 kms
of state highways will be taken up for up gradation as national highway
-Series of measures to
modernize ports
-800 cr for inland
waterways
-Action plan for
revival of unserved and underserved airports
-Will partner with
state govt to develop some of these airports to enhance regional connectivity
E. issues related to BANKING
AND FINANCIAL Sector:-
-Public Money should
reach the poor and deserving without any leakage
-A bill on targeted
delivery of financial services using Aadhar to be introduced
-SEBI act to be
amended to provide more benches on the security appellate tribunal
-Comprehensive code of
bankruptcy resolution of financial firms will be introduced as a bill in 2017
-Number of measures to
be undertaken to deepen corporate bond market
-RBI Act being amended
to provide statutory basis for monetary policy framework
-Process of
transformation of IDBI has already started; govt will reduce its stake below
50%
-PM Mudra Yojna amount
sanctioned has reached Rs 1 Lakh crore, next year's target is 1,80,000 crore
-Nationwide of ATMS,
micro-ATMs across the country
-RBI Act being amended
to provide statutory basis for monetary policy framework
-Financial Data
Management Centre for integrated data collection and analysis
-3,500 medical stores
to be opened under Pradhan Mantri Jan Aushodi Yojana
F. OTHER OVER ALL VIEWS:-
-FM announces 9
objectives for tax reforms
-Net impact of
taxation proposals is an increase in Govt revenue by Rs 19,610 cr
-To reduce multiplicity
of taxes and cascading - 13 taxes with collection less than Rs 50 Cr a year
abolished
-Companies Act to
amended for ease of doing business; to enable registration of companies in a
day
-Special Patent Regime
proposed to power innovation and research
-Revenue deficit
estimate for FY 2015-16 down to 2.5% from earlier estimates
-Fiscal deficit for
Financial Year 2016-'17 targeted at 3.5%
-Govt acknowledges
role of tax payer in nation building
-Taxation is a major
tool to remove poverty and inequality in the society'
-The fiscal target
will be retained at 3.9 for 2015-16, and 3.5 for 2016-17
-Plan and non-plan
classification of govt expenditure will be done away with
-General Insurance
companies owned by the govt will be listed in the stock exchanges
