The full-fledged Union Budget 2015 has been announced by Finance Minister Arun Jaitley today, on February 28th, 2015. With the Rail Budget 2015-16 bringing no significant sops for the poor, all eyes were on Arun Jaitley today right from when he flashed the briefcase before entering the Parliament in the traditional way. What needs to be seen is whether the finance minister has been able to acclaim NDA government’s slogan “Achhe Din” or not. Here, we have mentioned what Indian Budget 2015 has brought with it on all the crucial topics like Direct Tax, Indirect Tax, Banking sector, Defense, Education, FDI, Banking reforms and so on. Read on to find out what Indian Budget for fiscal year 2015-16 means to you and your pocket.
Mentioned below are the highlights of Union Budget 2015-16:
- India set to take off on faster trajectory of growth again.
- Forecasts for India have either been upgraded or kept stable.
- Credibility of Economy has been re-established.
- Current account deficit for FY15 to be below 1.3 % of GDP.
- Under Swacch Bharat Yojana, 50 lakh toilets have been build. Will build 6 crore more toilets.
- Embarked on two major GST and JAM Trinity.
- Expect CPI to remain close to 5% by year-end.
- To achieve 3.9% fiscal deficit in FY16.
- Three events of NDA Government: Success of Jan Dhan, coal auction and Swacch Bharat.
- Growth in 2015-16 expected at 8.1-8.5%.
- To allocate 25000 crore in 2015 to rural development fund for supporting agricultural sector.
- To increase income of our farmers. Creation of national agriculture market proposed.
- Allocations made to ongoing schemes: SC over Rs 30,000 ST over 19000 crore , women over 17000 crore.
- Tax free infrastructure bonds for road, rail and irrigation projects.
- Investment in infrastructure to go up by Rs. 70,000 crores.
- To allocate Rs. 1000 crore to enable IT start ups.
- To merge FMC and SEBI.
- To set up Public Debt Management Agency.
- To put in place Direct Tax Regime.
- Task force to create Financial Sector Redressal Agency to be set up.
- To introduce gold monetisation scheme.
- To allocate funds for MNREGA – Rs. 5,000 crore, Child development scheme – Rs. 15,00 crore, Child security scheme – Rs. 500 crore.
- To launch ‘Atal Pension Yojana’ for defined pension to the people, which will start at the age of 60.
- New scheme of providing physical aids for senior citizens living below poverty line proposed.
- ‘Nayi Manzil’ scheme proposed for the youth minorities.
- To enact new law for Black Money.
- Increase in Visa On Arrival facility from 43 to 150 countries.
- 1,000 crores allocated to ‘Nirbahya Fund’ for safety and empowerment of women.
- 80,000 secondary schools to get upgrade.
- To set up IIT in Karnataka; IIMs in J&K and Andhra Pradesh; AIIMS in J&K, Punjab, Himachal Pradesh and Assam.
- To set of fully IT based aid authority to monitor scholarship schemes.
- Special Fund established to ensure higher studies for students.
- To rationalise & remove exemptions for corporates.
- Basic rate of Corporate Tax reduced from 30% to 25% over next 4 years.
- Exemptions for Individual Tax payers to continue.
- Distinction between foreign direct investment and foreign portfolio investment will be abolished
- GAAR deferred by two years.
- To incentivise debit-credit card transactions.
- To exempt SAD on all items.
- To replace wealth tax with additional 2% surcharge on super rich with annual income of over 1 crore rupees.
- To increase central excise duty to 12.5%.
- Excise duty cut on footwears.
- Changes in Excise duty on cigarettes.
- To increase service tax rate from 12.36% to 14%.
- Transport Allowance exemption increased to Rs. 1600.
- To allow Exemption of Rs. 1.5 lakh under New Pension Scheme.
- Health insurance premium exemption raised to Rs 25,000 from Rs 15,000.
- Health Insurance premium limit for senior citizens to be Rs. 30,000.
- All contributions to Sukanya Samridhi scheme to be tax free.
- Giving the PAN number to be made mandatory for any purchases above Rs 1 lakh.
- Individual tax payer will benefit to the extent of Rs. 4,44,200 from the exemptions announced.
- To allocate Rs. 2.46 lakh crore for defence in FY16.
Although Union Budget for the year 2015-16 did not come with a bang, but it is indeed a bold budget. Given the fact that the economy is yet to take off, Arun Jaitley has announced a lot of positive things. He concluded by saying “Budget is roadmap for the future,” and has taken care of every section in the society like youth, adults, poor and rich. It focuses on job creation & job creators while also taking steps to control inflation and increase investment. It looks like a welcomed budget for all. Yet, we would say, Promises are big, expectations are also high. Let’s see what’s waiting for each one of us in terms of financial matters. What do you think of Union Budget 2015-16? Share your views in the comments below.
Following are some announcements which probably, are going to happen in 2015 Budget.
- Tax regime will likely become more stable and clear.
- Income Tax exemption limit is likely to be raised.
- Raise in Tax exemption limit on home loans is expected.
- Financial sector reforms which were postponed due to international financial crisis in 2008 are likely to return.
- Changes in excise and customs duties.
- Increase in Excise duties on non-durable goods.
- Excise duty hikes on Consumer Durable sector.
- Implementation of the General Anti-Avoidance Rule (GAAR) which is to be implemented from 1 April 2015 is likely to be deferred.
- Guidelines for the proposed International Financial Services Centre in Ahmedabad are expected to be announced.
- Reforms in tax structure and administration are likely to be made.
- R&D budget of IT companies is likely to be exempted from tax.
- Tax benefits on home ownership are expected to increase.
- Foreign firms are likely to get relief on Dividend Tax.
- Union Budget 2015 is likely to boost R&D activities in pharma.
- Tax holidays are expected to be introduced to boost digital companies.
- Increase in non-performing assets (NPA’s) in the banking sector is also expected to affect the Pooled Municipal Debt Obligation (PMDO) facility in 2015 Budget.
- Subsidies are most likely to be rationalized to bring the economy growth to 8 percent to 9 percent.
- Fuel subsidy bill has been diminished due to fall in oil prices while Expenditure growth are likely to be reduced.
- Suggestions from Bimal Jalan, former RBI governor, on rationalizing subsidies and public expenditure are likely to be incorporated in Budget 2015-16.
- Food subsidy bill is likely to be slashed.
- The US President Barack Obama’s India visit to India on Republic Day is also expected to result in some strategic ties between the two countries.
- The infrastructure and manufacturing sector are likely to gain momentum with the upcoming budget 2015.
- Government plans to reduce fiscal deficit to 3 percent over the next couple of years.
- Bills related to ordinances like coal e-auctions, insurance amendments, e-rickshaws, amendment to Citizenship Act, and land acquisitions are likely to be presented during budget session which could bring some new changes in the 2015 Budget.
- Foreign participants are expeceted to be involved in railway and defense manufacturing sectors in order to widen the scope of these sectors.
- Nifty and Sensex are likely to reach new heights before the budget.
- Capital expenditure on infrastructure projects will probably be highly emphasized.
- Recapitalization of public sector banks is expected to be announced.
- The interim recommendations of the expenditure management commission which is headed by Bimal Jalan, former RBI governor, will likely be incorporated.
- Non Banking Financing companies in infrastructure financing like L&T Financial holdings, IDFC and PFC are expected to be positively impacted.
- Parliament is further expected to call joint sitting to pass crucial bills.
- The upcoming National Health Policy is likely to increase Government spending of 1.5 per cent of the GDP to 2.5 per cent.
- The Indian budget 2015 is expected to bring higher investment allocations for development of Tier I and Tier II city airports.
- Hybrid and electric vehicles are expected to become cheaper.
- OROP (One Rank, One Pension) is likely to be implemented.
- Central Funding in social welfare schemes to states is expected to be reduced by 25-30%.
- Union Budget 2015 is expected to give support to manufacturing of electronic hardware like mobile phones and laptops as part of the ‘Make in India’ campaign.
- Power Expansion is likely to be emphasized.
- Implementation of National Electronics Policy 2012 is expected to be fast tracked.
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