The Union budget 2016-17 has been presented in the Parliament today, on February 29, 2016. With the budget already been announced by Finance Minister Arun Jaitley, you all must be wondering, what the budget 2016-17 has brought with it and how it is going to impact you. With a lot of expectations riding on Mr. Arun Jaitley, let’s find out what Indian Budget 2016-17 brings with it for us!
In this post, we have mentioned what Union Budget 2016 has brought with it on all the crucial topics like Direct Tax, Indirect Tax, Banking sector, Defense, Education, FDI, Banking reforms and more. Read on to find out what Union Budget for fiscal year 2016-17 will mean to you and your pocket.
Mentioned below are the highlights of Union Budget 2015-16:
- This year will have the additional burden of implementing the VII pay commission and the defense OROP.
- Nine pillars of 2016-17 Budget: Agriculture and farmers’ welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure, financial sector reforms, ease of doing business, fiscal discipline, tax reforms to reduce compliance burden.
- Farm, rural sectors to get more government spending.
- Allocation of Rs. 9,000 crore for Swachch Bharat Abhiyan.
- Allocation of Rs. 19,000 crore for PM Gram Sadak Yojana by 2019.
Agriculture & Farmer Welfare
- Provide connectivity from farm to market.
- To reorganize agricultural policy to double farmer income in five years.
- New scheme for BPL families for gas connections.
- Four schemes for animal welfare.
- 28.5 lakh hectares to be brought under irrigation.
- Four new dairy programmes to be introduced.
- Sum of 38,500 core allocated for MNREGA.
- 5,542 villages have been electrified.
- Two schemes to promote digital literacy for rural India.
- For rural development alone, Rs. 87,765 core allocated.
- LPG connection for women members of rural homes.
- Sum of Rs. 2,000 crore to provide LPG connections to BPL families.
- Total rural sector allocation of Rs. 87,769 crore.
- New health insurance scheme to be launched to provide cover of up to Rs. 1 lakh per family.
- National Dialysis service program proposed.
- 3,000 stores to be opened under Jan Aushadhi Scheme in 2016-17.
- Digital depository for School leaving certificates and diplomas.
- Allocation of Rs. 1700 core to set up skill development centers.
- Small shops should be given choice to remain open on all 7 days a week.
- Hub to support SC/ST entrepreneurs.
- Rs. 1,000 crore set aside for higher education financing.
Infrastructure & Investment
- Allocation of Rs. 97,000 crore on roads during year 2016-17.
- Total outlay on roads and railways for 2016-17 Rs. 2,18,000 crore.
- Total outlay on infrastructure for 2016-17 of over Rs. 2,21,000 crores.
- To amend Motor Vehicles Act to enable entrepreneurship in the road transport sector.
Financial Sector Reforms
- Allocation of Rs. 25,000 core towards recapitalization of public sector banks.
- Debt recovery tribunal will focus on improving existing infrastructure.
- Roll out of ATM’s, Micro ATM’s in rural areas.
- General insurance companies owned by the government to be listed in stock exchanges.
Ease Of Doing Business
- ‘Ek Bharat Shrestha Bharat’ to connect states with districts.
- Provident fund of 8.33 per cent for new government employees for first 3 years.
- Fiscal deficit targeted at 3.5% for 2016-17.
- Amendment in the Companies Act for speedy registration and to boost start-ups.
- Allocation of Rs. 100 crore for Deendayal Upadhyay’s birthday celebrations and Guru Gobind Singh 300th birth anniversary.
- Relief for small tax payers.
- Tax rebate from Rs. 2,000 to Rs. 5,000 for individuals with income not exceeding Rs. 5 lakh p.a.
- HRA deduction increased from Rs. 24,000 to Rs. 60,000 p.a.
- First time home buyers to get additional deduction of Rs. 50,000 on interest for loan up to Rs. 35 lakh, provided that the cost of house is not above Rs. 50 lakh.
- No change in Tax slabs.
- To implement GAAR from April 1, 2017.
- Under National Pension Scheme, 40% of withdrawal at the time of retirement, to be tax exempt.
- Lowering of Corporate IT rate for companies not exceeding Rs. 5 crore turnover to 25% plus surcharge.
- Excise duty increased by 10-15% on tobacco products, except bidis.
- SUVs, luxury cars to be more expensive.
- 1% Infrastructure cess to be levied on small cars and 2.5% on diesel cars and 4% on other high capacity engine vehicles.
- No retrospective amendments in future.
- 11 new benches for tax tribunals.
- No service tax for houses built under 60 square meters.
- Limited period compliance window for domestic taxpayers to declare undisclosed income.
The third Union Budget presented by Arun Jaitley didn’t come with a lot of bells and whistles. Although, the budget 2016-17 did not announce any major relief for individuals, but it did announce a lot of positive things. Let’s see what’s waiting for each one of us in terms of financial impact. What do you think of Union Budget 2016-17? Share your views in the comments below!
Union Budget 2016 Expectations
Following are some expectations from 2016 Union budget:
- The upcoming budget is expected to focus on agriculture, rural economy, infrastructure and banking systems.
- Tax benefits for non-cash transactions are likely to be announced.
- Tax exemption limit for health insurance is expected to be raised.
- The service tax exemption threshold for small businesses is likely to be raised.
- The basic exemption limit for taxpayers is likely to be raised from Rs. 2,50,000 to Rs. 3,00,000.
- The 2016 budget is expected to bring tax benefits for leather, gems & jewelery.
- Government is likely to introduce some measures to increase the penetration of health insurance in India.
- The Budget 2016-17 is expected to offer more support to start-ups.
- The upcoming budget is expected to bring a tax-friendly regime for start-ups to foster entrepreneurship.
- A framework for BEPS (Base Erosion and Profit Shifting) is expected to be introduced. This framework will keep a check on tax avoidance by multinational companies.
- A new policy to offer seamless credit system to boost ‘Make in India’ initiative is also expected to be announced. This policy is likely to allow 100% credit for taxes paid on inputs.
- Around 9% hike in defense budget allocation is also expected.
Read More On Budget Here.