The first reaction from people when asked - How was the Union Budget of 2015?
The obvious most reaction will be- not good. We are habitual to see the short term benefit we are getting. We also have our expenses and life style in such manner that every single penny saving at least on paper becomes important to us. We, the people are also frustrated because when we see that our money collected through tax is not being utilised properly and slashed as black money by politician.
For me, the budget is balanced one. Considering the global economy, we need to protect ourselves and plan for the future rather than deciding on more subsidies and more benefit.
Whatever is the income tax exempted bracket, a salaried employee only get his tax deducted and affected. If you look at consultant, self employed people and such category, they find a way not to pay tax and a chartered accountant find out a way to save taxes. This really pains. I have no choice, I have to see my taxes being deducted and without knowing where it is being used.
Here is the highlight of Union Budget of India for year 2015-16
Highlights of the Finance Budget 2015:
Budget for the Economy:
1) Total budget allocated for the expenditure in the year 2015-16 is Rs.17.77 Lacs Crore. Out of
Rs.17.77 Lacs Crore, Plan expenditure budget is Rs.4.65 lacs crore and non-plan expenditure
Rs.13.12 lacs crore.
2) GDP (gross domestic product) is targeted in the range of 8% to 8.50% for the year 2015-2016.
The GDP for the year 2014-2015 (current year) is set to be 7.4%.
3) Fiscal Deficit target to be 3.9% in 2015-16, 3.5% in 2016-17 and 3% in 2017-18. The Fiscal Deficit
for the current year 2014-15 is maintained at 4.1%.
4) Current Account Deficit is targeted to be 1.3% for the year 2015-16. This will help in
strengthening the Rupee against Dollar. Also it will help in curbing the inflation.
5) Bill / Laws for black money is introduced, with provision of imprisonment.
6) Gold monetizing scheme announced with proposal of Sovereign Gold Bond (an alternative to
purchasing physical gold). Its welcome step to control on the import of gold, which adversely
effect on CAD current account deficit. India import anywhere 800-1000 tonnes of gold every
year. Its estimates that Indian holds the stock of gold over 20000 tonnes.
7) Inflation target (CPI) set at 6%. The lower inflation rate will help to cut down the interest rate.
8) Announced the introduction of Bankruptcy Code. This will help the banks to take strong action
against stressed assets / loans (NPA).
9) The government projected receipts of Rs.69,500 crore from the disinvestment (i.e from sale of
government’s stake in government companies ).
10) Rs.2.75 Lacs allocated against Defense Budget ( 10% increase on year to year basis ).
11) Rs.70,000 crore declared for infrastructure development.
12) Setting up business in India to be made easy by prescribing simple compliance with a pre-
existing regulatory mechanism instead of prior multiple approvals permissions; expert
committee to be set up to examine and make recommendations in this regard.
Budget for Direct Taxes: Income Tax
1) No change in basic income tax slabs (no increase in basic exemption) for individual tax payers.
2) The limits of health insurance premium has been increased from Rs.15,000 to Rs.25,000 and for
senior citizen, the limits be Rs.30,000.
3) Conveyance allowances increased from Rs.800 per month to Rs.1,600 month. This benefit would
not be available to those employees who use the company’s car and claim the reimbursement
of the fuel expenses.
4) It’s mandatory to mention PAN on the invoice/document where the sale or purchase transaction
value exceeds Rs.1 Lacs.
5) Corporate Tax is to be reduced from 30% to 25%, over a period of 4 years. Please note that the
rate is not reduced with immediate date or for next year. The notification is awaited for the
same from the tax department.
6) The application of GAAR – General Anti Avoidance Rules is deferred for another 2 years. This
relief will attract more foreign investment in India.
7) 12% surcharge on tax for those individual whose income exceeds Rs.1 Crore. Earlier It was 10%.
8) Wealth Tax has been abolished, but surcharge has been increased for Super Rich Category
Taxpayer, instead of wealth tax. Wealth Tax collection was only Rs.1,000 crore in the previous
year, but by introducing new surcharge , it will fetch Rs.9,000 crore.
9) Tax exemption of interest earned on fixed deposit kept under Sukanya Samrudhi Scheme (Girl
child account). Also, the principal deposit amount is eligible for deduction U/s.80C within limits
of Rs.1.50 Lacs. The rate of interest on such deposit is 9.1%, which is higher than PPF account. If
you have a girl and you are looking for looking to invest for her education or marriage, then you
can consider this product as good investment, considering the tax benefits.
10) The limit under section 80DD and 80D for a person with disability is increased from Rs.50,000 to
Rs.75,000.
11) Finance Minister has proposed to bring back the tax free bond like Infrastructure Bond. But the
limit has not been declared. Notification is awaited for the limits.
12) No significant tax benefits for Salaried Employees. Only few tax benefits declared for employees
as follow:
a) Conveyance Allowance from Rs.800 to Rs.1600 per month
b) Medical Premium U/s.80D limits increased from Rs.15,000 to Rs.25,000 annually.
c) Additional Pension benefits of Rs.50,000 annually.
d) Reintroduction of tax free Infrastructure bond. Limits not yet declared.
13) Rate of TDS on royalties / technical services is reduced from 25% to 10%. This will attract more
technical collaboration with foreign company for import of technology in India to promote
“Make-In-India” concept.
14) Threshold limits for Domestic Transfer Pricing Transaction is increased from Rs.5 Crore to Rs.20
Crore.
15) With a view to encourage and enhance people’s participation in the national effort to improve
sanitation facilities and rejuvenation of river Ganga, section 80G is proposed to be amended so
as to provide 100% deduction for donations made by any donor to the Swachh Bharat Kosh and
to Clean Ganga Fund.
16) In case of sale or purchase transactions of immovable property (house, office, building, land
etc), payment in cash more than Rs.20,0000 is not allowed. This will affect the property deal in
rural area.
17) The definition for charitable purpose is proposed to be amended to include the activity of Yoga
as a special category. So any organization which provides service of Yoga to the public, then
income of such organization will be tax free.
18) Direct Tax Code is scrapped.
Budget for Indirect Taxes: Excise Duty and Service Tax and GST
1) Rate of Excise duty is increased to 12.50%. The education cess and higher education cess are
removed.
2) Service tax rate is increased from 12.36% to 14%. Again, the education cess and higher
education cess are removed.
But one more surcharge of 2% as Swachh Bharat Cess against Clean India Fund has been
introduced. So the effective service tax rate would be 16%. Please note that further notification
is awaited for 2% Swachh Bharat Cess.
3) GST to be applicable from 1st April 2016.
4) Custom Duty on Import of Steel is increased from 10% to 15%.
5) Excise Duty increased by 25% on cigarettes.
So, in a nutshell, this budget mostly focus on industrial growth and earning rather than spending. Perhpas, we will see a good and positive result of the same.
I hope you like this article. Please let me know your view
No comments:
Post a Comment