Budget 2016: Highlights

Finance Minister Arun Jaitley in his Budget 2016 speech stressed on Indian economy’s resilience amidst the current global economic turmoil. “Global economy is in a serious crisis. Financial markets have been battered but Indian economy has held its ground firmly.” “IMF has hailed India as a bright spot. Let us look at our achievements compared to the last three years of the last government. We inherited an economy with low growth and high inflation,” Jaitley said.

* No change in personal Income Tax slabs

* 4-month Compliance Window for domestic black money holders; tax, interest on them at 45%

* Relief for tax payers who earn below Rs 5 lakh; ceiling of rebate u/s 87A raised to Rs 5,000 from Rs 2,000

* House rent deduction raised from Rs 20,000 to Rs 60,000

* One-time dispute resolution scheme for retro tax cases, penalty, interest waived

* High level committee headed by Revenue Secretary to oversee creation of fresh liability using retro tax law

* Corporate Tax for new manufacturing units fixed at 25%

* Clean energy cess increased from Rs 200/ton to 400/ton on coal, lignite and peat

* First home buyers to get addl deduction of Rs 50,000 on interest for loan up to Rs 35 lakh; cost of house should not be more than Rs 50 lakh

* To achieve fiscal deficit of 3% of GDP by (2017-18)

* Fiscal Deficit target 3.9% in 2015-16, 3.5% in 2016-17

* Revenue Deficit to be 2.8% in 2015-16

* Current Account Deficit for 2015-16 at $14.4 billion or 1.4% of GDP

* Forex reserves at highest at $350 billion

* Budget lists 9 transformative pillars including doubling farm income by 2022, infrastructure, investment, reforms

* Highest ever allocation of Rs 38,500 cr for MGNREGA

* Certain equipment for dialysis exempt from basic customs duty, excise CVD

* Govt to circulate Model Shops and Establishment Bill, small retail shops may remain open for 7 days

* 100% rural electrification by May 1, 2018

* Govt to pay EPF contribution of 8.33% of new employees for first 3 years.

* Start-ups to get 100% tax exemption for 3 years except MAT which will apply from April 2016-2019

* To give statutory status to Aadhaar programme

* Infrastructure outlay at Rs 2.21 lakh cr

* Rs 35,984 crore earmarked for farmer welfare; to spend Rs 86,500 crore on irrigation in 5 years

* Rs 20,000 crore irrigation fund to be set up under NABARD

* Rs 2,000 crore for LPG connection to poor; scheme for MPG connection for women

* Stand Up India allocated Rs 500 crore

* Roads and highways allocation at Rs 55,000 crore; NHAI can issue tax free bonds.

* Long term capital gains for unlisted companies to be reduced from 3 to 2 years

* Rs 9,000 crore allocated to Swachh Bharat Abhiyaan

* Targets 10,000 km national highways, upgradation of 50,000 kms of state highways

* Incentivise gas production from deep sea, other unutilised deep sources

* Rs 31,300 cr Infra Bonds to be issued by various agencies– NHAI, IREDA, NABARD

* Further relaxation of FDI rules in insurance, pension, stock exchanges, asset reconstruction companies

* 100% FDI in food products made domestically

* Rs 25,000 cr for recapitalisation of PSU banks

* Department of Disinvestment renamed Department of Investment & Public Asset Management

* NITI Aayog to identify CPSEs for strategic sale

* To design framework for PSU bank consolidation

* To consider lowering govt stake in IDBI to below 50%

* Health insurance scheme to provide Rs 1 lakh per family

* Senior citizens to get additional healthcare cover of Rs 30,000 under the new scheme

* Comprehensive Code for providing specialised resolution mechanism for bankruptcy of banks/insurance firms

* To amend Companies Act for registration of firms in a day

* GAAR to be implemented from April 1, 2017.

* Legislation to deal with the menace of illicit deposit taking schemes

* Place of Effective Management rules deferred by a year

* Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of NPS

* Steps to re-vitalise Public-Private-Partnership mode

* Public Utility (Resolution of Disputes) Bill to be introduced, Guidelines for renegotiation of PPP Concession Agreements

* New credit rating system for infrastructure projects

* Interest rate setting Monetary Policy Committee in 2016.

*Krishi Kalyan Cess at 0.5% on all taxable services from June 1, 2016

* Infrastructure cess at 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles, SUVs

* Excise duties on various tobacco products other than beedi raised by about 10 to 15%

* RBI to facilitate retail participation in G-Secs

* New derivative products to be developed by SEBI

* PSU General Insurers to be listed in stock exchanges

* Review and rationalisation of Autonomous Bodies

* Amount sanctioned under Pradhan Mantri Mudra Yojana increased to Rs 1.80 lakh crore

* Govt to increase ATMs, micro-ATMs in post offices

* Service Tax to be exempted on general insurance schemes under NIRMAYA Scheme.

* DBT to be used to transfer subsidy on fertiliser in select districts on pilot basis

* Plan, non-Plan distinction to be done away with; a Committee to review FRBM

* Service tax on Single premium Annuity Policies reduced from 3.5% to 1.4% of the premium paid in certain cases

* 10% tax rate on income from worldwide exploitation of patents developed and registered in India by a resident

* NBFCs to get deduction of 5% of its income in respect of provision for bad and doubtful debts

* Basic custom and excise duty on refrigerated containers reduced to 5% and 6%

* 100% deduction for profits in housing project for flats up to 30 sq metres in four metros; 60 sq mts in other cities, approved during June 2016 to March 2019 and completed in 3 years. MAT to apply.

* Agriculture credit target highest at Rs 9 lakh crore

* Unified agriculture market e-platform will be dedicated to the nation on the birthday of B R Ambedkar

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