The Indian Finance Minister Arun Jaitley presented a pro-rural and pro-poor budget to defeat the popular notion that the present BJP government, which is popularly known as the 'MODI SARKAR' is the government of the rich industrialists.
Opening the budget with the announcement that CPI inflation has come down to 5.4% from 9 plus which is a huge relief for the public. He informed that the fiscal deficit target for next year is set at 3.5% of GDP, also promising to deal with tax evaders firmly.
Here are some of the noteworthy highlights of the Union Budget 2016:
Existing income tax slabs will remain the same for next fiscal year.
Dividend earned over Rs. 10 lakh per annum to be taxed at additional 10%.
With Rs, 1,000 crore allotted to EPF (Employees' Provident Fund) scheme, Govt. will pay EPF contribution of 8.33% for all new employees for first three years.
For higher tax payers, income tax surcharge has been increased from 12 to 15 % for incomes exceeding Rs 1 crore per annum.
A 0.5 % Krishi Kalyan Cess will be levied on all services. Thus bringing the cost of all commercial good higher.
For the people living on rent, good news is the deduction for rent paid has been increased from Rs 20,000 to Rs, 60,000.
If your house cost less than Rs. 50 lakhs you are eligible for an additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh,
No Service tax for housing construction of houses less than 60 sq. m
CARS AND CIGARETTES
A 1% service charge on purchase of luxury cars over Rs. 10 lakh for SUVs, Luxury cars to be more expensive with a 4% high capacity tax for SUVs. The Diesel vehicles will also see the highest increase in prices.
The finance minister also proposed a cess of 1% on small petrol, LPG and CNG cars, 2.5% on diesel cars of a given capacity and 4% on other high-powered vehicles and SUVs.
The Cigarette prices are being increased for the fifth successive year with FM today announcing a 10-15 % increase in excise duty for all tobacco products, except the ‘beedis’, for commonly used by the rural and poor masses.
Along with these banking and agriculture are given boost with various reforms:
To give a popular touch, the Govt has pledged to set aside Rs. 25,000 crores for the recapitalization of public sector banks, "We stand solidly behind these banks; our public sector banks will be strong and well supported” said the minister.
General Insurance companies will also be listed in the stock exchange.
Total allocation for agriculture and farmer welfare at Rs 35,984 crores, irrigation fund in NABARD set for Rs.20,000 cr. A Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojna.
On infrastructures Rs. 27,000 crore to be spent on roadways, centre to Partner with States to revive small airports for regional connectivity
100% FDI in marketing of food products produced and marketed in India.Shops to be given option to remain open all seven days in a week across markets.
The Minimum Alternative Tax (MAT) will be applicable for start-ups that qualify for 100 %tax exemption.
Even to the dismay of industry, there are no significant tax incentives to help India Inc. tide over the impact of global slowdown and shrinking exports.
In the words of the Finance Minister Jaitley, “My direct tax proposals would result in a revenue loss of Rs 1,060 crore and my indirect proposals are expected to yield Rs 20,670 crore. Thus, the net impact of all tax proposals would be revenue gain of Rs 19,610 crores".
Overall the budget has evoked mixed responses. His proposals has courted both bouquets and brickbats and a section of media has even termed it as the 'Robin Hood' Budget!