- Fiscal deficit seen at 3.9% of GDP in 2015-16, committed to meeting medium term fiscal deficit target of 3%.
- GDP growth seen between 8% and 8.5% this year.
- Consumer inflation to remain close to 5% by March, more room for monetary policy easing.
- No change in individual income tax rates and slabs, overall deduction benefits to individual taxpayers hiked to Rs 4.44 lakh a year.
- Disinvestment target set at Rs 41,000 crore for 2015-16.
- Exemption on health insurance premium hiked from Rs 15,000 to Rs 25,000. For senior citizens it is hiked to Rs 30,000.
- Service tax rate hiked to 14% from 12.36%.
- To implement Goods and Services Tax by April 2016.
- Wealth tax abolished. To be replaced by surcharge of 2% on income of Rs 1 crore and above. Move to fetch govt Rs 9,000 cr against Rs 1,008 currently mobilised under wealth tax.
- Corporate tax rate to be reduced from 30% to 25% over four years; deductions and exemptions to be rationalised.
- GAAR deferred by two years would apply prospectively from April 1, 2017
- A new benami transaction bill to be introduced to tackle domestic black money; enforcement agencies empowered to attach assets held abroad illegally; Undisclosed income to be taxed at maximum marginal rate, deductions and exemptions for such income won't be allowed; 10 years rigorous imprisonment for concealing foreign assets.
Sector Wise Highlights
- GDP growth seen between 8% and 8.5% this year.
- Consumer inflation to remain close to 5% by March, more room for monetary policy easing.
- No change in individual income tax rates and slabs, overall deduction benefits to individual taxpayers hiked to Rs 4.44 lakh a year.
- Disinvestment target set at Rs 41,000 crore for 2015-16.
- Exemption on health insurance premium hiked from Rs 15,000 to Rs 25,000. For senior citizens it is hiked to Rs 30,000.
- Service tax rate hiked to 14% from 12.36%.
- To implement Goods and Services Tax by April 2016.
- Wealth tax abolished. To be replaced by surcharge of 2% on income of Rs 1 crore and above. Move to fetch govt Rs 9,000 cr against Rs 1,008 currently mobilised under wealth tax.
- Corporate tax rate to be reduced from 30% to 25% over four years; deductions and exemptions to be rationalised.
- GAAR deferred by two years would apply prospectively from April 1, 2017
- A new benami transaction bill to be introduced to tackle domestic black money; enforcement agencies empowered to attach assets held abroad illegally; Undisclosed income to be taxed at maximum marginal rate, deductions and exemptions for such income won't be allowed; 10 years rigorous imprisonment for concealing foreign assets.
Sector Wise Highlights
Taxation
Abolition of Wealth Tax.Additional 2% surcharge for the super rich with income of over Rs. 1 crore.
Rate of corporate tax to be reduced to 25% over next four years.
No change in tax slabs.
Total exemption of up to Rs. 4,44,200 can be achieved.
100% exemption for contribution to Swachch Bharat, apart from CSR.
Service tax increased to 14 per cent.
Agriculture
Rs. 25,000 crore for Rural Infrastructure Development Bank.Rs. 5,300 crore to support Micro Irrigation Programme.
Farmers credit - target of 8.5 lakh crore.
Infrastructure
Rs. 70,000 crores to Infrastructure sector.Tax-free bonds for projects in rail road and irrigation
PPP model for infrastructure development to be revitalised and govt. to bear majority of the risk.
Atal Innovation Mission to be established to draw on expertise of entrepreneurs, and researchers to foster scientific innovations; allocation of Rs. 150 crore.
Govt. proposes to set up 5 ultra mega power projects, each of 4000MW.
Education
AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.IIT in Karnataka; Indian School of Mines in Dhanbad to be upgraded to IIT.
PG institute of Horticulture in Amritsar.
Kerala to have University of Disability Studies
Centre of film production, animation and gaming to come up in Arunachal Pradesh.
IIM for Jammu and Kashmir and Andhra Pradesh.
Defence
Allocation of Rs. 2,46,726 crore; an increase of 9.87 per cent over last year.Focus on Make in India for quick manufacturing of Defence equipment.
Welfare Schemes
GST and JAM trinity (Jan Dhan Yojana, Aadhaar and Mobile) to improve quality of life and to pass benefits to common man.
Six crore toilets across the country under the Swachh Bharat Abhiyan.
MUDRA bank will refinance micro finance orgs. to encourage first generation SC/ST entrepreneurs.
Housing for all by 2020.
Upgradation 80,000 secondary schools.
DBT will be further be expanded from 1 crore to 10.3 crore.
For the Atal Pension Yojana, govt. will contribute 50% of the premium limited to Rs. 1,000 a year.
New scheme for physical aids and assisted living devices for people aged over 80 .
Govt. to use Rs. 9,000 crore unclaimed funds in PPF/EPF for Senior Citizens Fund.
Rs. 5,000 crore additional allocation for MGNREGA.
Govt. to create universal social security system for all Indians.
Renewable Energy
Rs. 75 crore for electric cars production.
Renewable energy target for 2022: 100K MW in solar; 60K MW in wind; 10K MW in biomass and 5K MW in small hydro
Tourism
Develpoment schemes for churches and convents in old Goa; Hampi, Elephanta caves, Forests of Rajasthan, Leh palace, Varanasi , Jallianwala Bagh, Qutb Shahi tombs at Hyderabad to be under the new toursim scheme.
Visa on Arrival for 150 countries.
Gold
Sovereign Gold Bond, as an alternative to purchasing metal gold.
New scheme for depositors of gold to earn interest and jewellers to obtain loans on their metal accounts.
To develop an Indian gold coin, which will carry the Ashok Chakra on its face, to reduce the demand for foreign coins and recycle the gold available in the country.
Financial Sector
Forward Markets Commission to be merged with the Securities and Exchange Board of India
NBFCs registered with the RBI and having asset size of Rs 500 crore and above to be considered as ‘financial institution’ under Sarfaesi Act, 2002, enabling them to fund SME and mid-corporate businesses
Permanent Establishment norms to be modified to that mere presence of offshore fund managers in the country does not lead to “adverse tax consequences.”
For detailed highlights, visit http://indiabudget.nic.in/ub2015-16/bh/bh1.pdf
This post is sourced from The Hindu and Business Standard.