Budget 2016-2017 Simplified.

March 1, 2016

391

With big investments in the rural sector and a break for small tax payers, finance minister Arun Jaitley’s Budget 2016 on Monday was largely pro-rural and pro-poor. Read more about the Budget 2016-2017 –

INTRODUCTION-

Apart from being a very social budget, which was rural centric and pro agriculture it also stood out in the following areas-

Tax:

Infrastructure and agriculture tax to be levied.
Excise duty raised from 10 to 15 per cent on tobacco products other than beedi’s
1 per cent service charge for purchase of luxury cars over Rs. 10 lakh and cash purchase of goods and services over Rs. 2 lakh.
SUVs, Luxury cars to be more expensive. 4% high capacity tax for SUVs.
Companies with revenue less than Rs 5 crore to be taxed at 29% plus surcharge.
Limited tax cap window from Jun 1 – Sep 30 for declaring undisclosed income at 45%. Surcharge and penalties included.
Excise duty of 1 per cent imposed on articles of jewellery, excluding silver.
5 per cent Krishi Kalyan Tax to be levied on all services.
Pollution Tax of 1 per cent on small petrol, LPG and CNG cars, 2.5 per cent on diesel cars of certain specifications and 4 per cent on higher-end models.
Returns in excess of Rs. 10 lakh per annum to be taxed at additional 10 per cent.

Personal Finance:

No changes whatsoever have been made on existing income tax slabs.
Rs 1,000 crore allocated for the EPF (Employees’ Provident Fund) scheme.
Government will pay EPF contribution of 8.33% for all new employees for first three years.
Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 for the benefit of those living in rented houses.
Additional exemptions for Rs. 50,000 for housing loans up to Rs.35 lakh, provided cost of house is not above Rs.50 lakh.
Service tax exempted for construction of houses less than 60 sq m.
15 per cent surcharge on income above Rs.1 crore DF.

Social:

38,500 crore for Mahatma Gandhi MGNREGA for 2016-17.
Swacch Bharat Abhiyan allocated Rs.9,500 crores.
Hub to support SC/ST entrepreneurs.
Government is launching a new initiative to provide cooking gas to BPL families with state support.
LPG connections to be provided under the name of women members of the family – Rs 2000 crore allocated for 5 years for BPL families.
87 lakh crore grants to gram panchayats and municipalities – a quantum jump of 228%.
300 urban clusters to be set up under Shyama Prasad Mukherji Rurban Mission.
Four schemes for animal welfare.

Health:

2 lakh renal patients added every year in India. Basic dialysis equipment gets major relief.
A new health protection scheme for health will cover up to 1 lakh per family.
National Dialysis Service Program with funds thru PPP mode to provide dialysis at all district hospitals.
Senior citizens will get additional healthcare cover of Rs 30,000 under the new scheme.
PM Jan Aushadhi Yojana to be strengthened, 300 generic drug stores to be opened this year.

Education:

Scheme to get Rs.500 crore for promoting entrepreneurship among SC/ST
10 public and 10 private educational institutions to be made world-class.
Digital repository for all school leaving certificates and diplomas. Rs. 1,000 crore for higher education financing.
1,700 crore for 1500 multi-skill development centers.
62 new navodaya vidyalayas to provide quality education.
Digital literacy scheme to be launched to cover 6 crore additional rural households.
Entrepreneurship training to be provided across schools, colleges and massive online courses.
Objective to skill 1 crore youth in the next 3 years under the PM Kaushal Vikas Yojna.
National Skill Development Mission has imparted training to 76 lakh youth. 1500 Multi-skill training institutes to be set up.

Energy:

3000 crore earmarked for nuclear power generation.
Government drawing a comprehensive plan to be implemented in next 15-20 years for exploiting nuclear energy.
Government to provide incentive for deep-water gas exploration.
Deep-water gas gets new disc to get calibrated market freedom, pre-determined ceiling price based on landed price of alternate fuels.

Investments and infrastructure:

27,000 crore to be spent on roadways.
65 eligible habitats to be connected via 2.23 lakh kms of road. Current construction pace is 100 kms/day.
Shops to be given option to remain open all seven days in a week across markets.
55,000 crore for roads and highways. Total allocation for road construction, including PMGSY, – Rs 97,000 crore.
India’s highest-ever production of motor vehicles was recorded in 2015.
Total outlay for infrastructure in Budget 2016 now stands at Rs. 2,21,246 crore.
New Greenfield ports to be developed on east and west coasts.
Revival of underserved airports. Centre to Partner with States to revive small airports for regional connectivity.
100 per cent FDI in marketing of food products produced and marketed in India.
of Disinvestment to be renamed as Dept. of Investment and Public Asset Management.
Government will amend Motor Vehicle Act in passenger vehicle segment to allow innovation.
MAT will be applicable for startups that qualify for 100 per cent tax exemption.
Direct tax proposals result in revenue loss of Rs.1060 crore, indirect tax proposals result in gain of Rs.20,670 crore.

Agriculture:

Total allocation for agriculture and farmer welfare at Rs 35984 crores.
5 lakh hectares of land will be brought under irrigation.
5 lakh acres to be brought under organic farming over a three year period.
Rs 60,000 crore for recharging of ground water recharging as there is urgent need to focus on drought hit areas cluster development for water conservation.
Dedicated irrigation fund in NABARD of Rs.20.000 crore.
Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojna.

Banking:

Banks get a big boost: Rs 25,000 crore towards recapitalisation of public sector banks.
Target of disbursement under MUDRA increased to 1,80,000 crore.
Process of transfer of government stake in IDBI Bank below 50% started.
General Insurance companies will be listed in the stock exchange.
Govt to increase ATMs, micro-ATMs in post offices in next three years.

GIST:
The Union Budget 2016 is for Gao, Garib, Kisan, Mazdoor and Yuva. It well balanced and promising. The budget proposals have laid out a road map for all round development of the country based on 9 pillars prioritized for investment and 9 elements of tax reforms.
Agriculture sector, rural development, social sector including health and education, infrastructure and recapitalization of public sector has been rightly identified as priorities for 2016-17.
By providing 100% deduction from taxation of profits on construction of affordable housing, the budget aims to achieve the Prime Minister’s dream of “Housing For All” by 2022.