HRA deduction increased to Rs. 60,000 per annum; 40% of withdrawal under NPS to be tax exempt; additional exemption for housing loans.
Finance Minister Arun Jaitley presents his third Union Budget. With an eye on supporting the small tax-payer and the small investor, the Minister announced a slew of schemes, and income tax exemptions.
As it happened:
12.41 p.m.: Finance Minister Arun Jaitley tables the Union Budget 2016 and the Finance Bill.
12.40 p.m.: Rs. 1,060 crore revenue loss through direct tax proposals, and Rs. 20,670 crore revenue gain through indirect tax proposals. Revenue gain of Rs 19,600 crore in Union Budget 2016 proposals.
12.39 p.m.: 13 different cesses levied by various ministries with collections less than Rs.50 crore a year to be done away with.
12.38 p.m.: No Service Tax for houses built under 60 square metres.
12.35 p.m.: Excise duty on tobacco increased by 10-15 per cent.
12.34 p.m.: Committed to stable taxation regime. No more retrospective amendments.
12.29 p.m.: 4% high capacity tax for SUVs.
12.28 p.m.: Limited period compliance window for domestic taxpayers to declare undisclosed income. Declarations to have immunity from prosecutions.
12.26 p.m.: No changes have been made to existing income tax slabs.
12.25 p.m.: Infrastructure and agriculture cess to be levied.
12.23 p.m.: 1 per cent service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.
12.22 p.m.: Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.
12.20 p.m.: 40% of withdrawal at the time of retirement under National Pension Scheme to be tax exempt.
12.19 p.m.: Tax holiday for startups for three of five years of setting up the company
12.13 p.m.: Lowering of Corporate IT rate for companies not exceeding Rs. 5 crore turnover to 25% plus surcharge.
12.09 p.m.: People with income less than Rs 5 lakh to get deduction of Rs 5,000, up from Rs 2,000 last year. HRA deduction up from Rs. 24,000 to Rs. 60,000 p.a.
12.08 p.m.: Rs. 100 crore for Deendayal Upadhyay's birthday celebrations and Guru Gobind Singh 300th birth anniversary.
12.07 p.m.: Classification of expenditure as plan and non-plan to be done away with.
12.06 p.m.: Govt plans to spend Rs 19.78 lakh crore in 2016-17 — Rs 5.5 lakh crore under plan head, Rs 14.28 lakh crore under non-plan head.
12.06 p.m.: FIscal deficit at 3.5% of GDP in 2016-17.
12.04 p.m.: A bill on targeted delivery of financial services using Aadhar to be introduced.
12.03 p.m.: Amendment to the Companies Act to ensure speedy registration and boost start-ups.
12.02 p.m.: Rs. 900 crore for buffer stock of pulses.
12.01 p.m.: Dept of Disinvestment renamed as Dept of Investment and Public Asset Management.
12 noon: Direct Benefit Transfer for fertiliser subsidy.
11.59 a.m.: EPF at 8.33 per cent for new employees joining the scheme.
11.58 a.m.: Rs. 25,000 crore for recapitalisation of public sector banks. General insurance companies owned by the govt to be listed in stock exchanges.
11.56 a.m.: Amendmends to boost Asset Reconstruction Companies to manage NPAs of public sector banks.
11.55 a.m.: RBI Act to be amended to set up monetary policy committee.
11:53 a.m.: 100% FDI through FAPB route in marketing of food products produced and manufactured in India.
11.49 a.m.: Total outlay on infrastructure in 2016-17 is Rs. 2,21,246 crore
11.47 a.m.: In the power sector, the govt is drawing up a plan for 15-20 years to augment investment in nuclear power. Rs. 3,000 crore per annum for this.
11.45 a.m.: There are 160 airports and airstrips which can be revived.
11.44 a.m.: Motor Vehicles Act to be amended to enable entrepreneurship in the road transport sector.
11.43 a.m.: Total outlay for infrastructure is at Rs. 2.31 lakh crore.
11.42 a.m.: Rs. 97,000 crore for all roads. Total outlay on roads and rails will be Rs. 2.80 lakh crore. 10,000 km of national highways in 2016-17 and 50,000 km state highways to be converted to NH roads.
11.41 a.m.: More than 70,000 road projects were languishing at the beginning of the year. Nearly 85% of these projects have been put back on track.
11.39 a.m.: Small shops should be given the choice to remain open on all 7 days a week.
11.37 a.m.: Rs. 1,700 crore for 1500 multi-skill development centres.
11.35 a.m.: 10 public and 10 private educational institutions to be made world-class. Digital repository for all school leaving certificates and diplomas. Rs. 1,000 crore for higher education financing.
11.34 a.m.: Hub to support SC/ST entrpreneurs.
11.33 a.m.: National dialysis service programme under PPP model. LPG connection for women members of rural homes.
11.30 a.m.: Government to provide health insurance of upto Rs. 1 lakh per family; top up of Rs. 35,000 for people above 60 years. 3,000 stores to be opened for generic drugs.
11.30 a.m.: Total rural sector allocation Rs. 87,769 crore.
11.27 a.m.: Two schemes for digital literacy for rural India to cover 6 crore households in the next three years.
11.26 a.m.: Rs. 9,000 crore for Swachch Bharat Abhiyan.
11.25 a.m.: 5,542 villages have been electrified, more than the last three years combined.
11.24 a.m.: Rs. 38,500 crore for MNREGA. Highest ever for the rural employment scheme.
11.23 a.m.: Rs. 2.87 lakh crore for gram panchayats as per recommendation of 14th finance commission.
11.22 a.m.: Four schemes for animal welfare.
11.19 a.m.: Agricultural credit target of Rs. 9 lakh crore. Govt to allocate Rs 5,500 crore for crop insurance scheme.
11.19 a.m.: Unified e-platform for farmers to be inaugurated on Ambedkar's birthday.
11.17 a.m.: Paramparagat Krishi Vikas Yojana to bring 5 lakh acres under organic farming.
11.14 a.m.: 28.5 lakh hectares to be brought under irrigation.
11.13 a.m.: Govt will reorganise agricultural policy to double farmer income in five years.
11.11 a.m.: Jaitley announces the nine pillars of his Budget — Agriculture and farmers' welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure, financial sector reforms, ease of doing business, fiscal discipline, tax reforms to reduce compliance burden.
11.11 a.m.: New scheme for BPL families for gas connections. Staturtory backing for Aadhaar platform to ensure delivery of benefits.
11.10 a.m.: CAD is 1.4% of GDP.
11.10 a.m.: FY 16-17 will have the additional burden of implementing the VII pay commission and the defence OROP.
11.08 a.m.: FY 15-16 and 16-17 will be challenging for the government.
11.07 a.m.: Forex reserves are at the highest ever levels — $350 billion.
11.05 a.m.: GDP growth has accelerated to 7.6%. CPI inflation has come down to 5.4%.
11.05 a.m.: Mr. Jaitley says the Indian economy has held strong despite a global slowdown.
11 a.m.: Arun Jaitley rises to present the Budget.
10:46 am: Mr. Jaitley's Budget speech to begin in 15 minutes.
10:43 am: Union Cabinet clears General Budget for 2016-17.
10:29 am: Cabinet meeting in Parliament ends.
10:05 am: The Sensex falls 59 points in early trade on reduced bets by cautious retail investors amid continued capital outflows by foreign funds ahead of the Budget.
9:53 am: Pre-Budget Cabinet meet to begin shortly.
9:40 am: Mr. Jaitley, MoS Jayant Sinha arrive in Parliament.
9:19 am: The stock markets don't seem very enthused ahead of the Budget — Sensex opens 38.86 points lower, currently at 23,115.44.
9:10 am: The Budget may be given a dash of green with many environment-friendly measures to reduce the carbon footprint, official sources tell The Hindu. The budget is likely to provide incentives to encourage local manufacture and Research & Development (R&D) of electric vehicle components, including lithium-iron batteries.
9:00 am: About 8.5 crore employees whose retirement savings are managed by the Employees’ Provident Fund Organisation (EPFO) could get an option to transfer over a third of their EPF contributions to the National Pension System, regulated by the Pension Fund Regulatory and Development Authority or PFRDA.
8:54 am: How well do you know your budget history? Here are 11 landmark Union Budgets that you should know about.
8:45 am: Here’s a ready reckoner for some of the terms that will be a part of Mr. Jaitley’s long speech, that some of us may not be familiar with.
8:30 am: How long will this year’s Budget speech be? Which Finance Minister holds the dubious honour of presenting the longest budget speech, in terms of word count? Here’s a clue: it was an 18,650-word speech given 25 years ago!
8:00 am: Budgets are about numbers and best understood using charts and graphics. In case you missed it, here are the highlights of the previous Budget, captured in eight interactive charts.
7:30 am: The event provides us an opportunity to reflect on the proposals and promises that were made during last year’s Budget. We looked at some of them and checked the status of their implementation.
7:00 am: Here’s some interesting information. For Budget 2016-17, the government invited suggestions from citizens through Twitter for the first time, even conducting a series of polls to gauge public priorities and expectations from the Budget.
Here are some stories from The Hindu’s Focus Budget series and opinion pages:
— Suneet Reddy, MD, Apollo Hospitals, asks the Govt. to collect health insurance cess. "One viable way to do this is by collecting a health-insurance cess for general citizens including people below the poverty line and mandating subscription-based contributions from the organised sector. We need health savings funds, as part of salary savings, to create a corpus for individuals that would accrue over the long term without adding to their financial burdens."
— 'Accelerate shift to electronic payments for more revenue'. Global studies have shown the cost of cash to be between one per cent and three per cent of a country’s GDP. Given this, we are encouraged by the Government of India and RBI’s collective resolve to move to a cashless society as outlined in the Digital India vision, argues T.R. Ramachandran, Group Country Manager, India and South Asia, Visa.
— Brotin Banerjee, MD and CEO, Tata Housing, says the GST can be a gamechanger for the real estate industry. He also says, "To achieve the objective of ‘Housing for All’, affordable housing projects should be exempted from Income Tax for seven years till 2022 and Excise and Customs Duty which constitutes 15% currently."
— 'Exempt airlines from MAT'. Ajay Singh, chairman, MD of SpiceJet, says airlines should be exempted from application of MAT till all the accumulated book losses (including unabsorbed depreciation) are set off against future book profits. "All the lease transactions take place outside India and there is virtually no tax revenue on this account to the Government of India. This section should be reinstated with additional benefits to Indian leasing companies and leasing transactions done in India. It will help in smooth leasing of aircraft and aircraft engines in India."
— “While new policy initiatives, which may be announced during the 2016 Budget, may provide respite temporarily, improving the long-term investment environment in India requires the government and regulators to put improving corporate governance firmly on its agenda.” Here are some reasons on why the Budget needs to focus on improving corporate governance.
— Kiran Mazumdar-Shaw, Chairman and Managing Director, Biocon, says Pharma and biotech sectormust get its due in Budget. She argues that a Budget that puts PM Modi’s ambitious socio-economic initiatives into action would go a long way in pulling the nation out of its current state of despondency by pushing the development agenda for India with increased vigour and scripting a new economic growth story.
— Here’s another thought. M. Govinda Rao, Emeritus Professor, National Institute of Public Finance and Policy says, “Given the pressing need for financial prudence and the equally pressing need for increasing public investment, the Finance Minister needs to raise additional resources and rationalise and target subsidies.”
— “French politician Georges Bidault had in some seriousness described that “a good agreement is one which leaves all parties equally dissatisfied.” No Budget can satisfy all expectations, much less aspirations. It would be judged on whether the preferred options and the balancing act are credible and compelling.” N.K. Singh, a former civil servant and Rajya Sabha MP.
