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FM Presents Pro-Corporate Budget 2015-16, Little to Cheer Aam Aadmi

India’s finance minister Arun Jaitley presented the 2015-16 budget with a pro-corporate and market-friendly budget that will reduce corporate tax by 5% over the next 4 years but for the Aam Aadmi, it gives less individually and promises more collectively.

By increasing the service tax to 14% flat, he has taken away money directly from the pockets of the middle class man. All purchases of Rs.1 lakh and more are made to quote PAN number compulsorily. Concealment of foreign assets made strictly punishable now.

The overall incentives to entry level tax payer is increased from Rs.2.5 to 4.44 lakh but most of them are tied to insurance, in a way giving boost insurance players and Warren Buffett-managed firms.

Now corporate banks and NBFCs can go after tax defaulters with more teeth. Local banks to benefit more now. Baba Ramdev has been made happy with yoga coming under charitable institutions, thus getting tax and other benefits over a period.

The Income tax benefits slightly increased but get offset by concurrent increase in service tax. In effect, the finance minister is able to levy more tax than rebates, belying the Aam Aadmi.

Details of tax deductions proposed are as follows:
• Deduction u/s 80C Rs 1,50,000 •
Deduction u/s 80CCD Rs 50,000 •
Deduction on account of interest on house property loan (Self occupied property) Rs 2,00,000 •
Deduction u/s 80D on health insurance premium Rs 25,000 •
Exemption of transport allowance Rs 19,200 Total Rs 4,44,200


* Personal income tax rates unchanged as indicated in our reports earlier.

* Increase in limit of deduction in health insurance from Rs.15,000 to Rs.25,000

* For senior citizens, this limit to be increased from Rs.30,000 from present Rs.10,000

* Deduction limit of Rs.60,000 on account of serious diseases to be enhanced to Rs.80,000 for senior citizens

* Exemption on contributions to Pension Fund hiked from Rs.1 lakh to Rs.1.5 lakh per year

* All investment payments in ‘Sukanya Scheme’ will be fully exempted from tax

* Transport allowance exemption raised from Rs.800 to Rs.1,600 per month

* Universal social security system for all Indians, especially poor and disadvantaged sections

* Atal Pension Yojna for economically disadvantaged

* PPF and EPF corpus to be utilised for senior citizens’ welfare fund

* Physical aids and assisting devices for physically challenged senior citizens

* Wealth Tax to be abolished and additional two percent tax on super rich to yield Rs.9,000 crore annually

* GDP growth at 7.4 percent in 2014-15 and at 8-8.5 percent in 2015-16; double-digit growth feasible

* Non-Plan expenditure in 2015-16 estimated at Rs.1,312,200 crore; Plan expenditure estimated at Rs.465,277 crore

* Tax collection in 2015-16 estimated at Rs.1,449,490 crore

* Adequate provision for defence with Rs.246,727 crore earmarked for 2015-16

* Investment on infrastructure to go up by Rs.70,000 crore in 2015-16 over 2014-15

* Education sector allocated Rs.68,968 crore; rural development gets Rs.79,526 crore

* Nirbhaya Fund gets another Rs.1000 crore in 2015-16

* Facilities at eight World Heritage Sites to be restored

* Government to soon launch National Skills Mission

* During 2015-16 AIIMS-like institutes to be set up in Jammu and Kashmir, Punjab, Tamil Nadu and Himachal Pradesh; Bihar to get second AIIMS-like institution

* Karnataka to get an IIT; Indian School of Mines in Dhanbad to be upgraded to IIT

* Fully IT-based student-help facility for needy students

* Corporate tax to be reduced to 25 percent from 30 percent in four years

* Tax exemption for contributions to ‘Swachh Bharat Abhiyan’ and ‘Clean Ganga Fund’ by corporates as part of CSR

* In last nine months several steps taken to effectively deal with problem of black money

* Comprehensive new law to be brought against black money

* Rigorous imprisonment of up to 10 years for concealing income

* Prevention of Money Laundering Act to be amended to provide for forfeiture of property in India if the one abroad cannot be attached

* Law against Benami property in fight against black money

* Quoting PAN essential in property transactions

* Forwards Markets Commission to be Merged with Sebi

* Splitting of transaction not to be permitted

* Changes in excise on tobacco items, including cigarettes, paan masala and gutkha

* Excise duty on footwear with leather uppers to be reduced to six percent

* Service tax and education levy to be consolidated from 12.36 percent to 14 percent

* Swachh Bharat cess of two percent, if necessary

* Tax regime to be rationalised

* Applicability of General Avoidance Rules (GAR) to be deferred by two years in view of problems faced in its implementation

* New structure to be put in place in banking sector for seamless integration of data

* Eastern states to be given opportunity to develop faster. Special boost to Bihar and West Bengal as in the case of Andhra Pradesh and Telangana

* Good progress in DMIC corridor and other infra-projects. Rs.1,200 crore earmarked and additional funds if pace of work picks up on ongoing projects

* Procurement law to be drawn up to ensure transparency and remove corruption

* Centenary of Deen Dayal Upadhyay to be celebrated; committee for this to be set up soon

* Good progress being made on Digital India

* To discourage transactions in cash, Rupee debit card to incentivise credit transactions

* In line with ‘Act East Policy’, steps to catalyse investment in this sector through a project development company to oversee investments in Cambodia, Laos and Vietnam

* Tourism has increased after Visa on Arrival introduced for 43 countries. This facility to be increased to 150 countries in different stages

* Public Debt Management Agency to be created to strengthen the bond market

* Gold Monetisation Scheme to be introduced; sovereign gold bonds to be introduced; working on developing Indian gold coin with Ashok Chakra on face

* Vision of making India cashless society

* Foreign Investment in alternative investment funds to be permitted

* Ports in public sector to be encouraged to utilise land under their control

* Make India investment-destination by streamlining permission procedures

* Five ultra-mega power projects each of 4,000 MW to be set up; Second unit of Kudankulam Nuclear Power Station will be commissioned in 2015-16

* Self Employment and Talent Utilisation (SETU) to be Established

* Integrated education and livelihood scheme to be launched

* National investment and infrastructure fund to be launched with corpus of Rs.20,000 crore to generate more funds

* Innovation initiative to be launched in NITI Aayog in the name of former prime minister Atal Bihari Vajpayee

* Government committed to increasing access of people to the banking system

* Postal network across the country to be used for increasing access to formal financial system

* Main challenges: increasing agricultural production; increasing investment in infrastructure; with manufacturing declining, Make in India will create jobs; cooperative federalism

* Agriculture credit targetted at Rs.8.5 lakh crore

* Rural jobs scheme to get Rs.34,699 crore; Allocation to be enhanced by Rs.5,000 crore if additional funds available; Every poor to get a job

* To work with NITI Aayog for creating a National Agricultural Market

* Need well-targeted system for subsidies.

* Direct transfer of subsidy to LPG consumers

* Appeal to well-off consumers to surrender subsidised LPG connections

* Organic farm schemes of agriculture ministry to be supported

* ‘Per drop More crop’ scheme for better irrigation

* Three achievements – Jan Dhan Yojna, coal auctions, Swachh Bharat

* Two more gamechanging reforms: Goods and Services Tax, JAM trinity (Jan Dhan Yojna, Aadhar, Mobile number) to ensure transparency

* Our achievement to conquer inflation, CPI inflation at five percent by year-end

* We are in an economic environment far more positive than in the recent past

* Undertaken several significant steps to energise the Indian economy in last nine months

* India’s chance to fly

* Budget proposals lay down roadmap for economic growth.

* “The Everlasting Flame” exhibition on Parsis to be launched


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