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Key Features of Budget 2015 – 2016

India Budget 2015 – 2016 Highlights. Today we are providing highlights of India Budget 2015 – 16, and a list of what will be costlier & list of what will be cheaper as per Budget 2015 – 16, Key Features of Budget 2015-2016, Income tax, Service tax amendments, Changes in tax, Tax slab rates, sector-wise highlights and other important points in Budget 2015. This is very useful to CA IPCC, Final, ICWAI Inter, CMA Final, CS Executive and Professional students.

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List of Items Costlier and Cheaper as per Budget 2015 – 2016

See below list of items costlier and cheaper as per Budget 2015.

Following is a list of what will be costlier:

  • Cigarettes and other tobacco products
  • Completely built imported commercial vehicles
  • Cement
  • Aerated, flavoured drinks and packaged water
  • Plastic bags and sacks
  • Business and executive class air travel
  • Visit to amusement and theme park
  • Music concerts
  • Liquor
  • Chit fund and lottery
  • Gold and gold jewellery

Following is a list of what is cheaper:

  • Leather footwear priced above Rs 1,000 per pair
  • Locally made mobile phones
  • LED/LCD panels, LED lights and LED lamps
  • Solar water heater
  • Pacemakers, ambulance and ambulance services
  • Computer tablets
  • Agarbattis
  • Microwave ovens
  • Refrigerator compressors
  • Peanut butter
  • Packaged fruits and vegetables
  • Visit to museum, zoo and national park.

Benefits to Middle Class Tax-Payers Budget 2015 – 16

  • Limit of deduction of health insurance premium increased from `15000 to `25000, for senior citizens limit increased from `20000 to `30000.
  • Senior citizens above the age of 80 years, who are not covered by health insurance, to be allowed deduction of `30000 towards medical expenditures.
  • Deduction limit of `60000 with respect to specified decease of serious nature enhanced to `80000 in case of senior citizen.
  • Additional deduction of `25000 allowed for differently abled persons.
  • Limit on deduction on account of contribution to a pension fund and the new pension scheme increased from `1 lakh to `1.5 lakh.
  • Additional deduction of `50000 for contribution to the new pension scheme u/s 80CCD.
  • Payments to the beneficiaries including interest payment on deposit in Sukanya Samriddhi scheme to be fully exempt.
  • Service-tax exemption on Varishtha Bima Yojana.
  • Concession to individual tax-payers despite inadequate fiscal space.
  • Lot to look forward to as fiscal capacity improves.
  • Conversion of existing excise duty on petrol and diesel to the extent of `4 per litre into Road Cess to fund investment.
  • Service Tax exemption extended to certain pre cold storage services in relation to fruits and vegetables so as to incentivise value addition in crucial sector.
  • Negative List under service-tax is being slightly pruned to widen the tax base.
  • Yoga to be included within the ambit of charitable purpose under Section 2(15) of the Income-tax Act.
  • To mitigate the problem being faced by many genuine charitable institutions, it is proposed to modify the ceiling on receipts from activities in the nature of trade, commerce or business to 20% of the total receipts from the existing ceiling of `25 lakh.
  • Most provisions of Direct Taxes Code have already been included in the Income-tax Act, therefore, no great merit in going ahead with the Direct Taxes Code as it exists today.
  • Direct tax proposals to result in revenue loss of `8315 crore, whereas the proposals in indirect taxes are expected to yield `23383 crore. Thus, the net impact of all tax proposals would be revenue gain of `15068 crore.

Ease of doing business – Minimum Government Maximum Governance Budget 2015 – 16

  • Simplification of tax procedures.
  • Monetary limit for a case to be heard by a single member bench of ITAT increase from `5 lakh to `15 lakh.
  • Penalty provision in indirect taxes are being rationalised to encourage compliance and early dispute resolution.
  • Central excise/Service tax assesses to be allowed to use digitally signed invoices and maintain record electronically.
  • Wealth-tax replaced with additional surcharge of 2 per cent on super rich with a taxable income of over `1 crore annually.
  • Provision of indirect transfers in the Income-tax Act suitably cleaned up.
  • Applicability of indirect transfer provisions to dividends paid by foreign companies to their shareholders to be addressed through a clarificatory circular.
  • Domestic transfer pricing threshold limit increased from `5 crore to `20 crore.
  • MAT rationalised for FIIs and members of an AOP.
  • Tax Administration Reform Commission (TARC) recommendations to be appropriately implemented during the course of the year.
  • Education cess and the Secondary and Higher education cess to be subsumed in Central Excise Duty.
  • Specific rates of central excise duty in case of certain other commodities revised.
  • Excise levy on cigarettes and the compounded levy scheme applicable to pan masala, gutkha and other tobacco products also changed.
  • Excise duty on footwear with leather uppers and having retail price of more than `1000 per pair reduced to 6%.
  • Online central excise and service tax registration to be done in two working days.
  • Time limit for taking CENVAT credit on inputs and input services increased from 6 months to 1 year.
  • Service-tax plus education cesses increased from 12.36% to 14% to facilitate transition to GST.
  • Donation made to National Fund for Control of Drug Abuse (NFCDA) to be eligible for 100% deduction u/s 80G of Income-tax Act.
  • Seized cash can be adjusted towards assessees tax liability.

Budget 2015 – 16 Tax Proposal

  • Objective of stable taxation policy and a non-adversarial tax administration.
  • Fight against the scourge of black money to be taken forward.
  • Efforts on various fronts to implement GST from next year.
  • No change in rate of personal income tax.
  • Proposal to reduce corporate tax from 30% to 25% over the next four years, starting from next financial year.
  • Rationalisation and removal of various tax exemptions and incentives to reduce tax disputes and improve administration.
  • Exemption to individual tax payers to continue to facilitate savings.
  • Broad themes :
    • Measures to curb black money;
    • Job creation through revival of growth and investment and promotion of domestic manufacturing – “Make in India” ;
    • Improve ease of doing business – Minimum Government and maximum governance;
    • Improve quality of life and public health – Swachh Bharat;
    • Benefit to middle class tax-payers; and
    • Stand alone proposals to maximise benefit to the economy.

Others

  • Increase in basic custom duty:
    • Metallergical coke from 2.5 % to 5%.
    • Tariff rate on iron and steel and articles of iron and steel increased from 10% to 15%.
    • Tariff rate on commercial vehicle increased from 10 % to 40%.
  • Basic custom duty on digital still image video camera with certain specification reduced to nil.
  • Excise duty on rails for manufacture of railway or tram way track construction material exempted retrospectively from 17-03-2012 to 02-02-2014, if not CENVAT credit of duty paid on such rails is availed.
  • Service-tax to be levied on service provided by way of access to amusement facility, entertainment events or concerts, pageants, non recoganised sporting events etc.
  • Service-tax exemption:
    • Services of pre-conditioning, pre-cooling, ripening etc. of fruits and vegetables.
    • Life insurance service provided by way of Varishtha Pension Bima Yojana.
    • All ambulance services provided to patients.
    • Admission to museum, zoo, national park, wile life sanctuary and tiger reserve.
    • Transport of goods for export by road from factory to land customs station.
  • Enabling provision made to exclude all services provided by the Government or local authority to a business entity from the negative list.
  • Service-tax exemption to construction, erection, commissioning or installation of original works pertaining to an airport or port withdrawn.
  • Transportation of agricultural produce to remain exempt from Service-tax.
  • Artificial heart exempt from basic custom duty of 5% and CVD.
  • Excise duty exemption for captively consumed intermediate compound coming into existance during the manufacture of agarbathi.

 Sector-wise Highlights as per Union Budget 2015

TAXATION

1 Abolition of Wealth Tax.
2 Additional 2% surcharge for the super rich with income of over Rs. 1 crore.
3 Rate of corporate tax to be reduced to 25% over next four years.
4 No change in tax slabs.
5 Total exemption of up to Rs. 4,44,200 can be achieved.
6 100% exemption for contribution to Swachch Bharat, apart from CSR.
7 Service tax increased to14 per cent.

AGRICULTURE

1 Rs. 25,000 crore for Rural Infrastructure Development Bank.
2 Rs. 5,300 crore to support Micro Irrigation Programme.
3 Farmers credit – target of 8.5 lakh crore.

INFRASTRUCTURE

1 Rs. 70,000 crores to Infrastructure sector.
2 Tax-free bonds for projects in rail road and irrigation
3 PPP model for infrastructure development to be revitalised and govt. to bear majority of the risk.
4 Atal Innovation Mission to be established to draw on expertise of entrepreneurs, and researchers to foster scientific innovations; allocation of Rs. 150 crore.
5 Govt. proposes to set up 5 ultra mega power projects, each of 4000MW.

EDUCATION

1 AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.
2 IIT in Karnataka; Indian School of Mines in Dhanbad to be upgraded to IIT.
3 PG institute of Horticulture in Amritsar.
4 Kerala to have University of Disability Studies
5 Centre of film production, animation and gaming to come up in Arunachal Pradesh.
6 IIM for Jammu and Kashmir and Andhra Pradesh.

DEFENCE

1 Allocation of Rs. 2,46,726 crore; an increase of 9.87 per cent over last year.
2 Focus on Make in India for quick manufacturing of Defence equipment.

WELFARE SCHEMES

1 GST and JAM trinity (Jan Dhan Yojana, Aadhaar and Mobile) to improve quality of life and to pass benefits to common man.
2 Six crore toilets across the country under the Swachh Bharat Abhiyan.
3 MUDRA bank will refinance micro finance orgs. to encourage first generation SC/ST entrepreneurs.
4 Housing for all by 2020.
5 Upgradation 80,000 secondary schools.
6 DBT will be further be expanded from 1 crore to 10.3 crore.
7 For the Atal Pension Yojana, govt. will contribute 50% of the premium limited to Rs. 1,000 a year.
8 New scheme for physical aids and assisted living devices for people aged over 80 .
9 Govt. to use Rs. 9,000 crore unclaimed funds in PPF/EPF for Senior Citizens Fund.
10 Rs. 5,000 crore additional allocation for MGNREGA.
11 Govt. to create universal social security system for all Indians.

RENEWABLE ENERGY

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

TOURISM

1 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.
2 Visa on Arrival for 150 countries.

GOLD

1 Sovereign Gold Bond, as an alternative to purchasing metal gold.
2 New scheme for depositors of gold to earn interest and jewellers to obtain loans on their metal accounts.
3 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.

FINANCIAL SECTOR

1 Forward Markets Commission to be merged with the Securities and Exchange Board of India
2 NBFCs registered with the RBI and having asset size of Rs 500 crore and above to be considered as ‘financial institution’ under Sarfaesi Act, 2002, enabling them to fund SME and mid-corporate businesses
3 Permanent Establishment norms to be modified to that mere presence of offshore fund managers in the country does not lead to “adverse tax consequences.”

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