Union Budget Highlights 2015-16
About the Union Budget 2015The ' Budget', or officially, the Union Budget, is the prime written representation attributing the financial planning and strategy of the Government of India for the next financial year. The 2015-16 Union Budget of India was tabled in the Lok Sabha (Lower House of the Parliament) by Arun Jaitley, the Union Minister of Finance, on 28 February 2015..
Principal Highlights of the Union Budget 2015
Income Tax-The slabs of the Personal Income Tax would be slashed and the tax payers will finally have respite to some extent as it was expected; however, the Income Tax slabs for individuals witnessed no changes. The Wealth Tax was nullified completely. While the surcharge was increased from 10% to 12% on Hindu Undivided Families (HUF), Bodies of Individuals (BOI), Associations of Persons (AOPs), cooperative societies, firms, artificial juridical persons, local authorities and individuals.
Social Security-A choice between Employee Provident Fund (EPF) and National Pension Scheme (NPS) was given to salaried employees as their pension fund. One Pensions Fund and two new insurance schemes were introduced to upthrust the social security for poor citizens. Persons with full disability (or death) will get a coverage of Rs. 2 lakh under the provisions of the Pradhan Mantri Suraksha Bima Yojna scheme, while the persons with partial disability would get a compensation worth Rs. 1 lakh, with just Rs. 12 per annum as the premium.
The Union Minister of Finance Arun Jaitley also announced a life insurance scheme called Pradhan Mantri Jeevan Jyoti Bima Yojna, under this scheme the beneficiary will be paid Rs. 2 lakh in case of death. Under the scheme, the insured person will be supposed to pay an annual premium of Rs. 330. A pensions scheme meant for the un-organised sector by the name Atal Pension Yojna was also announced.
Service Tax-An increase in the service tax from 12.36% to 14% was also announced by the Finance Minister Arun Jaitley. An additional 2% tax will also be mustered on a select few services under the 'Swach Bharat' cess that was announced in the budget. The exemption on service tax provided to the Mutual Fund agents was also revoked, while exemption was given to the Varishtha Bima Yojna meant for senior citizens.
Corporate Tax-The finance minister also announced that the Corporate Tax rates would also be reduced from 30% to 25% over a period of four years, applicable from April 2016. But 2% surcharge will be levied on earnings above Rs. 10 crore. The minister announced 100% deduction to the donations made under the corporate social responsibility for the Clean Ganga Plan and Swachh Bharat Abhiyan.
Custom Duty-Twenty-two components used in electronics sector were exempted from import duty. The custom/import duty was further removed from magnetrons, solar water heaters, refrigerator components and peacemaker components. But the duty levied on imported commercial vehicles was raised from 10% to 40%.
Announcements related to EducationThe education sector was allocated a total of Rs. 69,074 crore. In order to find employment without school leaving certificate, the government introduced a scheme called Nayi Manzil to enable the minority youth.
Following are the major announcements that were made by the finance minister for the education sector:
- Five new All India Institute for Medical Sciences (AIIMS) will be set up in the states of Punjab, Jammu and Kashmir, Himachal Pradesh, Tamil Nadu and Assam.
- One Indian Institute of Technology (IIT) will be set up in Karnataka and two Indian Institutes of Management (IIMs) will be set up in Andhra Pradesh and Jammu and Kashmir.
- National Institutes of Pharmaceutical Education and Research will be set up in Rajasthan, Chhattisgarh and Maharashtra.
- Post Graduate Institute of Horticulture Research and Education will be set up in Amritsar.
- Institute of Science and Education Research will be set up in Odisha and Nagaland.
- Apprenticeship Training Institute for Women will be set up in Haryana and Uttarakhand.
About the Union Budget 2014Finance Minister Arun Jaitley presented the Budget for 2014-15, against the backdrop of high inflation and the economic slowdown with the people's expectations running high in Prime Minster Narendra Modi's reformist credentials to restore confidence in India's economy. Following is the summary of the Budget 2014-15:
- Fiscal deficit target of 4.1 per cent of GDP for 2014/15
- Fiscal deficit seen at 3.6 per cent of GDP in 2015/16
- Tax-to-GDP ratio to be raised
- No change in income tax rates; personal income tax exemption limit raised from Rs 2 lakh to Rs 2.50 lakh
- Investment limit under Section 80C increased from Rs 1 lakh to Rs 1.5 lakh
- Tax exemption on interest component on housing loan raised to Rs 2 lakh from Rs 1.5 lakh
- Tax exemption limit for senior citizens raised from Rs 2.5 lakh to Rs. 3 lakh
- 10-year tax holiday for power companies which start production and distribution on March 31, 2017
- Goods and Services Tax to be approved by the end of this year
- No change in rules on retrospective tax. All pending cases of retrospective tax to be examined by a high-level committee before action is taken
- Extension of 5 per cent withholding tax on corporate bonds until June 30, 2017
- Changes proposed in transfer pricing mechanism
- Limit on foreign direct investment in defence sector raised from 26 per cent to 49 per cent; and FDI limit in insurance sector to 49 percent
- 100 smart cities to be set up and Rs 7,060 crore to be provided for development of such cities:
- Necessary tax changes to introduce real estate investment trusts and infrastructure investment trusts
- Rs 4000 crore to be spent for affordable housing through National Housing Bank and extending tax incentives for housing loans
- Food and petroleum subsidies to be more targeted
- Rural job-guarantee scheme, which provides 100 days of paid employment a year, will become more focused on asset creation
- Focus on achieving 4 per cent growth per year in agriculture
- Farm credit target set at Rs 8 trillion for 2014/15
- A long-term rural credit fund proposed with an initial corpus of Rs 50 billion.
- Commitment to sustaining 4% growth in agriculture, extend credit to joint farming groups
- Rs 500 crore allocated for stabilising prices of agricultural commodities
- Rs 3600 crore set aside for National Rural Drinking Water Mission
- Target of 7-8 per cent economic growth rate in next 3-4 years
- Focus on reviving growth particularly in manufacturing sector and infrastructure
- Anti-poverty programmes to be targeted well.
- Basic custom duty on LCD and LED TV below 19 inch reduced to zero from 10 per cent.
- Imported electronics goods to cost more.
- Sugary carbonated drinks to get costlier
- Cigarettes, gutkas, cigars to cost more
- CRT TVs exempted from customs duty to help poor
- Revenue deficit pegged at 2.9 per cent of GDP
- Plan expenditure of Rs 5, 75,000 crore proposed for current ficsal.
- Annual PPF ceiling to be enhanced to Rs 1.5 lakh, from Rs 1 lakh
- Airports to be developed in tier 1 and 2 cities, 16 new port projects to be awarded this year
- Investment in NHAI and state highways to the tune of Rs 37,887 crore, including Rs 3000 crore for North East
- Commitment of 24x7 power supply to all homes
- Single KYC norms for all financial services and one demat account for all financial products
- Rs 500 crore for solar power development project in Tamil Nadu and Rajasthan
- Rs 11,600 crore for developing outer harbour projects Rs 11,600 crore for developing outer harbour projects
- Mining issues to be resolved on priority
- 20 new industrial clusters announced
- Greater autonomy to banks under consideration
- Finance to 5 lakh landless farmers through NABARD
- Manufacturing units will be allowed to sell their products through retail and e-commerce
- Rs 8000 crore for national housing banking programme
- Metro rails in PPP mode; Rs. 100 crore set aside for metro scheme in Ahmedabad and Lucknow
- Rs 100 crore to set up virtual classrooms
- Rs 500 crore for setting up 5 more IIMs and IITs
- Rs 200 crore credit scheme for start-ups by those from scheduled castes and tribes
- Skill India, a programme to train youth for jobs
- Equity in PSU banks to be raised through share sale to the public
- MGNREGA programme to be made more productive
- Rs 100 crore for Beti Bachcao, Beti Padhao Yojana
- Senior Citizens Pension Plan Extended Till August 2015
Union Budget 2014-15Union Budget 2015-16Last Updated on : May 30, 2015