Intellectual Thoughts by Sanjay Panda !!!!!: Indian Budget Highlights ( FY 2015-16)


Sunday, March 1, 2015

Indian Budget Highlights ( FY 2015-16)



PERSONAL INCOME TAX

  •    No revision of income tax brackets.
  •  Limit of deduction of health insurance premium increased to INR 25,000 from 15,000; limit increased to  INR 30,000 from 20,000 for the elderly People.
  •  People aged above 80 and not covered by health insurance to be allowed deduction of  INR 30,000  for medical expenses.
  •  Additional deduction of  INR 25,000 for the disabled.
  •  Limit on deduction for contributions to pension fund and new pension scheme increased to 150,000  from 100,000.
  •  Additional deduction of 50,000 rupees for contribution to new pension scheme under section 80CCD.
  •  Monthly transport allowance exemption doubled to 1,600.

FISCAL DEFICIT

  • Fiscal deficit seen at 3.9 percent of GDP in 2015/16.
  • Remain committed to meeting medium term fiscal deficit target of 3 percent of  GDP. ( By FY 2017-18).

GROWTH

  • GDP growth seen at between 8 - 8.5 % y/y.
  • Expects consumer inflation to remain close to 5% by March.

REVENUES

  • Revenue deficit seen at 2.8 percent of GDP.
  • Non tax revenue seen at 2.21 trillion rupees.

MARKET REFORMS

  • Propose to merge  FMC  with SEBI.
  • Bankruptcy code to be brought by FY 2015-16.
  • Public Debt Management Agency (PDMA) bringing both external and domestic borrowings under one roof to be set up this year.
  • Proposes to introduce a public contract resolution of disputes bill.

POLICY REFORMS

  •  To enact a comprehensive new law on black money.
  •  Propose to create a social security system for  all Indians.
  •  To raise visa-on-arrival facility to 150 countries from 43.

GENERAL ANTI-AVOIDANCE RULES (GAAR).

  • Government defers rollout of anti-tax avoidance rules GAAR by two years.
  • GAAR to apply prospectively from April 1, 2017.
  • Retrospective tax provisions will be avoided.

TAXATION

  • To abolish wealth tax.
  • Replaces wealth tax with additional 2 pct surcharge on super rich.
  • Proposes to cut Corporate tax  to 25 % over next four  years from 30%.
  • Net gain from tax proposals seen at 150.68 billion rupees.
  • Expects to implement goods and services tax by April 2016.
  • To reduce custom duty on 22 items.
  • Basic custom duty on commercial vehicle doubled to 20%.
  • Proposes to increase service tax rate and education cess to 14% from 12.36 %.

IMPORT TAX

  • Import tax on iron and steel increased to 15 %from 10 %.
  • Import tax on metallurgical coke increased to 5 % from 2.5 %.
INFRASTRUCTURE

  • Investment in infrastructure will go up by 700 bln rupees in 2015/16 over last year
  • Plans to set up national investment infrastructure fund ( NIIF).
  • Ports in public sector will be encouraged to corporatize under Companies Act.
  • Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects.
  • 5 New  "ultra mega" power projects for 4,000 MW each to be set up.
EXPENDITURE

  •  Plan expenditure estimated at about 4.65 trillion rupees.
  • Non-plan expenditure seen at about 13.12 trillion rupees.
  • Allocates 2.46 trillion rupees for Defence.
  • Allocates 331.5 billion rupees for health sector.
SUBSIDIES
  • Food subsidy seen at 1.24 trillion rupees
  • Fertiliser subsidy seen at 729.69 billion rupees
  • Fuel subsidy seen at 300 billion rupees
  • Major subsidies estimated at 2.27 trillion rupees.