HIGHLIGHTS OF BUDGET 2015
[Based on Finance Minister
Speech]
A.
DIRECT TAXES
INDIVIDUALS
/ HUF / AOP / BOI
Ø No change in income tax rates, no
change in exemption limits.
Ø Transport Allowance for salaried
persons increased to Rs. 1600 per month from Rs. 800 per month.
Ø Deduction
for health insurance premium increased from Rs. 15,000 to Rs. 25,000. For
Senior citizens it is increased from Rs. 20,000 to Rs. 30,000/-
Ø Senior
Citizens above the age of 80 years, not covered in health insurance, will be
allowed Rs. 30,000 towards medical treatment.
Ø Additional
deduction of Rs. 25,000/- will be allowed for differently abled persons u/s
80DD as well as u/s 80U.
Ø Investment
in Sukanya Samridhi Yojna is eligible for deduction u/s 80C. Interest income
under this account will also be exempt from tax.
Ø Deduction
on account of contribution to new pension scheme / new pension fund increased
from Rs. 1 lakh to Rs. 1.5 lakh.
Ø Additional deduction of Rs.
50,000 under section 80CCD under new pension scheme.
Ø Wealth Tax Abolished.
Ø Additional surcharge of 2% on super
rich earning income of Rs. 1 crore or more.
CORPORATES:
Ø Corporate Tax rates to be reduced to 25% over next four years.
Ø 100% deduction allowed for all contributions in ‘Swachh Bharat
Abhiyan’ and Clean Ganga fund except contributions in CSR u/s 80G.
Ø Deduction for employment of new regular workman to all business
entities. The existing eligibility limit of 100 workmen has been reduced to 50.
Ø Domestic Transfer Pricing:- Threshold limit for Specified
Domestic Transaction increased from Rs. 5 crores to Rs. 20 Crores.
INTERNATIONAL
TRANSACTIONS / NRI / FOREIGN TAXATION:
Ø GAAR Provisions deferred for 2 years. Will
apply prospectively on Investments made on or after 01.04.2017.
Ø
Income tax on royalty & fees for technical services to be reduced
from 25% to 10%
Ø Mere presence of Fund
Manager of Offshore Funds shall not constitute of Permanent Establishment.
Ø For FIIs, capital
gains on transactions in securities which are liable for lower rate of tax
shall not be liable for MAT.
OTHER
PROPOSALS / ANNOUNCEMENTS:
Ø Yoga included within
the definition of charitable purpose under Section 2(15) of Income tax Act and
accordingly will get the benefit.
Ø Provision to prohibit
acceptance of amount of more than Rs 20,000 for purchase of immovable property.
Ø Quoting of PAN is
mandatory for purchasing an immovable property in excess of Rs. 1 Lakh.
Ø Rental income for
REITs shall have a pass through regime.
Ø Direct Tax Code will
be abolished.
Ø CBDT & CBEC will share information
with each other and will use each other database.
Ø New Law on Black Money : Important Features
·
New Law to help out to bring the black money.
·
Offence will be non compoundable.
·
Penalty @ 300% shall be levied on tax evasion.
·
10 years Rigorous Imprisonment for
concealing foreign assets.
·
7 Years imprisonment for non-filing of Income Tax Return with inadequate
disclosure of foreign assets
·
Undisclosed Income to be taxed at maximum marginal rate,
deductions and exemptions for such income won’t be allowed.
·
Offenders can't approach Settlement Commission
under the new law.
·
Appropriate amendment will be made in Prevention
of Money Laundering Act.
·
Amendment will be made in FEMA.
B.
INDIRECT TAXES
Ø Goods & Service Tax shall
be implemented from 1st April, 2016.
Service Tax:
Ø Effective Service tax rate changed
from 12.36% to 14%.
Ø Pre-cooled services
for fruits and vegetables will be exempt from service tax.
Ø Services of Common
Effluent Treatment Plant shall be out of the purview of service tax.
Ø Service Tax Exemption
on Varistha Bima Yojna.
Excise Duty:
Ø Excise Duty Rate hiked; Education cess
and Secondary Higher education cess merged in excise rate. Effective excise
duty rate will be 12.5%.
Ø Excise duty on leather footwear having
retail price of more than Rs. 1,000 is reduced to 6%
Ø Full exemption from CENVAT for various
products and reduced SAD on import of raw materials.
Ø Petroleum products exempt from excise duty
hike.
Ø Proposal to exempt SAD on all items.
Ø Propose some changes in excise duty on cigarettes.
Ø Cess on coal increased.
Custom Duty:
Ø
Proposal to reduce Basic Custom Duty on certain input raw material to
minimize duty inversion
Ø Proposal to reduce customs duty
on 22 items.
C.
ECONOMY
/ INVESTMENTS / EXPENDITURES / OTHERS:
RBI Act will be amended this year.
Target of Inflation to be kept below 6%
Housing for Every citizen by 2022. To
see 6 crore housing units in rural and urban areas by year 2020.
Successful implementation of Jan dhan yojana as over 12.5 crore families covered as part of
financial inclusion initiative
States having coal reserves to get lakhs of crores of
rupees through coal auction
Swachh Bharat Abhiyan: 50 lakh toilets already
completed, target is to have 6 crore toilets in coming period.
80000 Secondry schools to get upgradation.
1 Lakh km of new roads to be sanctioned and will be on top
priority.
Transfer to states shall be 62% of total receipts.
Direct transfer of benefits to be expanded
Allocation of Rs. 5300 crore for micro irrigation.
Allocation of Rs. 5300 crore for MNREGA
Allocation of Rs. 25000 crore for Rural Infra
Allocation of Rs. 20000 crore for Mudra Bank for SMEs
Allocation of Rs. 20000 crore for national Infra Funds.
Allocation of Rs. 5000 crore to create world
class IT hub in India.
Allocation of Rs 15,000 crore to scheme for skill
rural India.
Allocation of Rs 15,000 crore to Nirbhaya Fund.
Additional allocation of Rs. 24000 for Rail / Roads.
Farm Credit Target for FY 2016 revised to Rs. 8.5 lakh crore
Subsidy leakage will be curbed and not the subsidy.
Disinvestment programme of PSU will be upscaled.
Comprehensive bankruptcy code of global standards will be implemented.
Unclaimed deposits of Rs 3,000 crore in EPF to be used
for benefit of senior citizens.
Proposal for a Senior Citizen Welfare Fund, new scheme
for providing assisted devices for those below poverty line
Atal Pension Yojana to provide defined pension
according to contribution, in which 50% contribution will be made by the government.
New Health insurance scheme for poors for an annual
premium of Rs. 12 for a risk cover of Rs. 2 lakh.
Unclaimed deposits of Rs 3,000 crore in EPF to be used
for benefit of senior citizens
Atal Innovation Mission to foster culture of research
among India's and global brains.
Public Sector Ports to be made firms under Companies
Act.
5 Ultra Mega Power projects of 4000 MW each will be
set up
Proposal to merge Commodity regulator [FMC] with SEBI,
MCX can see increased regulation.
Expert panel to prepare draft on easing permissions for
doing business.
Task force to be set up to establish grievance agency
for financial redressals
Rupay Debit Cards to be incentivised. Move towards
paperless transactions.
Regulatory Reform law for infrastructure shall be
introduced.
Proposal of AIIMS in J&K, Punjab, TN, Himachal
Pradesh and Assam; to augment AIIMS-like institute in Bihar.
Indian Institute of Mines in Dhanbad to be upgraded to
IIT status; Karnataka to get IIT.
Incentives for Higher Education of Students.
National Skills Mission planned to power youth.
Govt to allocate funds for roads out of Excise Duty Collection
from Petrol and Diesel.