Monday, February 29, 2016

Highlights of Union Budget 2016-17

Following are the highlights of Union Budget 2016-17 presented by Finance Minister Arun Jaitley in Parliament on Monday:
   * 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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