Union Budget 2015: An Overview


The Union Finance Minister Arun Jaitley presented his first full-fledged Budget of Prime Minister Narendra Modi’s government on February 28, 2015. The Union Budget suggested that States must be equal partners in economic growth, a move is must for making India cashless society and social sector programmes must be continued. Some of the challenges are to be met i.e. poor agricultural income, decline in manufacturing and the need for fiscal discipline. By doing this there will be a boost in investment and ordinary people get benefit.

Sector-wise highlights of Union Budget 2015

TAX BENEFITS FOR INDIVIDUAL BELOW 60 YEARS

Finance Minister Arun Jaitley claimed the Tax benefits for individual below 60 years add up to Rs 4,40,200.

  • Basic exemption limit: Rs 2.5 lakh
  • Deduction under Section 80C: Rs 1.5 lakh
  • Deduction under Sec 80D: Rs 25,000 (up from Rs 15,000)
  • Increase in transport allowance from Rs 800 to Rs 1,600: Rs 19,200
  • Rs 2.5 lakh + Rs 1.5 lakh + Rs 25,000 + Rs 19,200 = Rs 4,44,200

TAXATION

Jaitley proposed for modification of permanent establishment norms so that the mere presence of a fund manager in India would not constitute a permanent establishment of the offshore fund, resulting in adverse tax consequences.

  • Net gain from tax proposals seen at Rs 150.68 billion.
  • Total exemption of up to Rs. 4,44,200 can be achieved.
  • Abolition of Wealth Tax and additional 2% surcharge for the super rich people with income of over Rs. 1 crore.
  • Corporate Tax Rate to be reduced to 25% over next four years and Corporate tax of 30 percent is uncompetitive.
  • 100% exemption for contribution to Swachch Bharat, apart from CSR.
  • Proposes to increase service tax rate and education cess to 14 percent from 12.36 percent
  • Proposes to rationalise capital gains tax regime for real estate investment trusts
  • To reduce custom duty on 22 items
  • Expected to implement goods and services tax by April 2016
  • Plans to introduce direct tax regime that is internationally competitive on rates without exemptions
  • To enact tough penalties for tax evasion in new bill
  • Tax dept to clarify indirect transfer of assets and dividend paid by foreign firms
  • Health insurance premium exemption raised to Rs. 25,000 from Rs. 15,000.
  • All contributions to Sukanya Samridhi scheme to be tax free.
  • Transport allowance given to all taxpayers, limit increased from Rs. 800 to Rs. 1600 per month.
  • Excise duty on footwear having retail price of more than 1000 per pair has been reduced by 6 per cent.

AGRICULTURE

  • Rs. 25,000 crore dedicated for Rural Infrastructure Development Bank.
  • Rs. 5,300 crore dedicated to support Micro Irrigation Programme.
  • Farmers credit to be fixed at target of 8.5 lakh crore.

POLICY REFORMS

  • To bring a new bankruptcy code in 2015-16
  • move to amend the RBI act this year, and provide for a monetary policy committee
  • Proposes to introduce a public contract resolution of disputes bill
  • Propose to merge commodities regulator with SEBI
  • Foreign Exchange Management Act to allow for seizure of foreign properties and assets.
  • To set up public debt management agency
  • To enact a comprehensive new law on black money
  • To establish an autonomous bank board bureau to improve management of public sector banks

INFRASTRUCTURE

  • Unplanned expenditure for 2015-16 is estimated at Rs. 13,12, 200 crores.
  • Plans to set up national investment infrastructure fund.
  • Rs. 70,000 crores devoted to Infrastructure sector in 2015-16 over last year .
  • Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects and will need to build additional 100,000 km of road.
  • Ports in public sector will be encouraged to corporatise under Companies Act.
  • PPP model for infrastructure development to be revitalised and govt. to bear majority of the risk.
  • Govt. proposes to set up 5 ultra mega power projects, each of 4000MW.
  • Second unit of Kudankulam nuclear power station to be commissioned in 2015-16.
  • NITI to be established and involvement of entrepreneurs, researchers to foster scientific innovations and Rs. 150 crore allocated for Research & Development.

EDUCATION

  • Rs. 68,968 crore set aside for the Education Sector.
  • AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.
  • IIT in Karnataka; Indian Institute of Mines in Dhanbad to be upgraded to IIT.
  • PG institute of Horticulture in Armtisar.
  • Kerala to have University of Disability Studies
  • Centre of film production, animation and gaming to come up in Arunachal Pradesh.
  • IIM for Jammu and Kashmir and Andhra Pradesh.

DEFENCE

For the Need of the Armed Forces, the budget allocation for Defence for the year 2015-16 is 246727 crore.

  • Focus on Make in India for quick manufacturing of Defence equipment.

RENEWABLE ENERGY

  • Rs. 75 crore for electric cars production.
  • Renewable energy target for 2022: 100K MW in solar; 60K MW in wind; 10K MW in biomass and 5K MW in small hydro

TOURISM

  • Develpoment schemes for churches and convents in old Goa. Hampi, Elephanta caves, Forests of Rajasthan, Leh palace, Varanasi, Jallianwala Bagh, Qutb Shahi tombs at Hyderabad to be under the new toursim scheme.
  • Visa on Arrival for 150 countries instead of 43.

WELFARE SCHEMES

  • Propose to create a universal social security system for all Indians.
  • All villages should be provided with connectivity.
  • Allocates 346.99 billion rupees for rural employment guarantee scheme in 2015-16.
  • 50,000 toilets constructed under Swachh Bharath Abhiyan and goal of 6 crore toilets will be met soon.
  • Two other programmes to be introduced- GST & JAM Trinity. GST will be implemented by April 2016.
  • MUDRA bank will refinance micro finance orgnisations to encourage first generation SC/ST entrepreneurs.
  • Housing for all by 2020.
  • Upgradation 80,000 secondary schools.
  • DBT will be further be expanded from 1 crore to 10.3 crore.
  • For the Atal Pension Yojna, govt. will contribute 50% of the premium limited to Rs. 1000 a year. It will provide a defined pension to the people, which will start at the age of 60.
  • ‘Pradhan Mantri Suraksha Bima Yojana’, which will provide accidental insurance coverage of Rs. 2 lakh.
  • New scheme for physical aids and assisted living devices for people aged over 80 .
  • Govt to use Rs. 9000 crore unclaimed funds in PPF/EPF for Senior Citizens Fund.
  • To launch a national skills mission soon to enhance employability of rural youth.
  • Proposed a new scheme of providing physical aids for senior citizens living below poverty line.
  • Proposed the ‘Nayi Manzil’ scheme for the youth minorities.
  • To allocate to Child development scheme for Rs. 15,00 crore and Child security scheme for Rs. 500 crore.
  • To support women security programs, an additional allocation of Rs. 1,000 crore to ‘Nirbhaya Fund’.

GOLD

  • Sovereign Gold Bond, as an alternative to purchasing metal gold.
  • New scheme for depositors of gold to earn interest and jewellers to obtain loans on their metal accounts.
  • To develop an Indian gold voin, which will carry the Ashok Chakra on its face, to reduce the demand for foreign coins and recycle the gold available in the country.

Courtesy: Mr. Ashish Baral,

Good Luck!!!

Team Aspirant Forum

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