Union Budget 2015-16 summarized

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With all eyes on the budget, at 10:28 am Arun Jaitely came carrying a brown suitcase, close to his heart, and flashing it in front of the camera as if carrying some high priced traded commodity

Jokes apart…..every person had some expectations though he be a BJP supporter, dangling congress supporter or others who are left with AAP to support, for they got to support something, right?

Some of them being Increased investments, Tax rates reduced, Jobs creation, Infrastructure, manufacturing, R&D, Promoting startup, Innovate in India along with make in India, Fiscal consolidation, For every 1 law brought – 10 must be removed, 1st April, 2016 rollout of GST, Clarity on public investment, No retrospective taxes forever, etc. and many others depending upon their social and intellectual status and understanding of an emerging nation’s requirements

What was laid down by our Finance Minister were as follows though not in the same order-

  1. With 34699 crores for MNREGA, it will be continued with an additional flow of 5000 crores in annual allocation- with a thought to bring more jobs in rural areas and an increase in wages
  2. Sanction of 1 lakh km of new roads and funds to clean rivers
  3. 80000 secondary schools to be upgrade
  4. 6 crores toilet targeted with 50 lakh being already built – a target to both reduce crime and improve sanitation
  5. Rationalising subsidies, stopping leakages which probably means that everyone won’t be getting free discounts – although no clear indications of the categorisation criteria
  6. 5300 crores for micro irrigation, 25000 crores for rural development fund, 45000 crores, 5 lakh crores credit to be given to famers, 34699 crores MNREGA, Mudra bank 20k crores to refinance and finance SMEs, Suraksha Bhima Yojana, offering coverage of 2 lakh rupees for just premium of just Rs 12 per year and many such schemes to help the poor and farmers grow along with the country
  7. Atal pension yojana with 50% contribution from government which will make the retirement secure
  8. Senior citizen welfare fund which will be providing physical aids to senior citizen and also Rs 30000 rebate in health expenses for them by the government on an annual basis
  9. Infrastructure-
    1. Go up by 70k crores
    2. Tax free infrastructure bonds for rail and road projects
    3. Initial sum of Rs 150 core to create world class IT hub to take advantage of our competitiveness.
    4. Proposes 5 ultra-mega power projects for 4,000 MW each
    5. Direct tax regime, internationally competitive
  10. Cash less society to be attained via financial inclusion in which all are provided insurance and RuPay Debit Card which will enhance flow of electronic money
  11. Indian gold coin with Asoka symbol with a motive of reducing the demand of foreign cons- Gold Monetization Scheme
  12. 150 countries be included in visa on arrival provision to promote tourism and Forex
  13. Employee’s contribution to EPF below an income threshold will be optional without reducing employer’s contribution.
  14. 75 crores for electric vehicles to remove curb pollution levels though the allocation of fund not so much adequate
  15. Tax proposals
    1. The whole idea began with making the tax policies predictable and remove any retrospective tax policies which can create problem for the industry like what happened in Vodafone.
    2. Many indirect transfers are proposed to be excluded from the scope of the indirect transfer tax and all that would still be in the purview would be clearly defined.
    3. Service tax increased to 14% and 2% Swachh Bharat cess on the service tax to get more revenue for clean energy initiatives like this.
    4. In India so far 30% has been the corporate tax rate which along with other surcharges added up to approximately 33% while in other Asian countries the average tax rate was 21.5% with china offering 25%, Singapore 17% and Thailand 20%, therefore a tax rate cut to 25 % over a period of 4 years might attract investments
    5. In addition to this surcharge has been increased from 10% to 12% on companies and individuals earning more than Rs 1 crore which is a counter act for removing the wealth tax. This is predicted to bring Rs 9000 crore as revenues instead of Rs 1000 crore from wealth tax
    6. Serious laws like imprisonment of 10 years and ‘benami transaction’  prohibition policies are formed to curb flow of back money both international and domestic
    7. GST- Goods and Services Tax which is meant to divide the tax burden equally between the manufacturing and services by levying a lower tax rate and increasing the tax base. It is to be implemented by April,2016 and is expected to bring $15 billion a year if properly implemented
    8. Provided clarity on whether long term capital gains on transfer of units in Real Estate Investment Funds via IPO will be exempted or not.
    9. General Anti Avoidance Ruling(GAAR) to be in action starting 1st April, 2017 and would be applied on investments post this date
    10. PAN number necessary for any transaction above Rs 100000 to tighten the reporting of cash transactions
    11. No income tax up to Rs 250000, 10% on income between Rs 250000 and Rs 500000, 20% on income between Rs 500000 and Rs 1000000 and 30% on income above Rs 1000000, and a taxpayer can save now a maximum of Rs 4,42,000 from deductions
    12. Not filing Income Tax returns or filling with wrong details may lead to 7 years imprisonment.
    13. Excise duty reduced by 6 % over Rs 1000 on footwear – Bata India share increased 3.19 % by the time I wrote this.
    14. Net gain from tax proposals seen at 150.68 billion rupees in 2015-16
    15. All contributions to Sukanya Samridhi scheme to be tax free – specially designed for girls’ higher education or marriage needs, a scheme for minor girls in which govt. pays 9.1 % interest on the savings

Well these were some points of the budget which I thought were of importance. Some points maybe missed but to rate the budget I think I would give 8.5 because overall it covered all areas of improvement but some parts were missing and some being addressed indirectly which may be to manage the fiscal deficit. Common man may be disappointed if he was expecting more tax cuts and freebies as a part of the budget. It’s time that everyone understands that budget can’t be just pro-poor or pro-rich, It has to be balanced and this is a balanced budget. Let’s see what’s in for us in future.

Fingers crossed!!!

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