incometax, service tax, custom,excise, finance act

1. Highlights of India
Budget 2015-16
Chartered Accountants
Caratteristiche salienti di India Budget 2015-16
Höhepunkte Indiens Budget 2015-16
インドの予算2015から16のハイライト
印度2015-16年财政预算案的要点
ไฮไลท์ของอินเดียงบประมาณ 2015-16
Faits saillants de l'Inde Budget 2015-16
Aspectos destacados de la India Presupuesto 2015-16

2. 2015-16
Keywords of Budget
energise
growth
financial inclusion
foreign inflows
manufacture
black money
job creation
higher education
doing business
health
welfare
infrastructure
revival
maximum governance
red tape
maximise

3. 2015-16
General budget

4. 2015-16
State of Economy
• Mood of pessimism and uncertainties engulf a number
of advanced and emerging economies
Global
economy
• Brighter prospects in India as economy stands
relieved of economic slowdown, persistent inflation,
elevated fiscal deficit, slackening domestic
demand, external account imbalances, and
oscillating value of the rupee
Worst behind
us
• India‟s growth accelerating from 5.1 % during 2012-
13 to 6.9% during 2013-14 and to 7.4% in 2014-15Take-off India
• Economic reforms can give steam to the rolling engine
of Indian economy to take it to double digit growthThrust area

5. 2015-16
India Macromized
Fiscal Deficit
Stronger
Current Account
Deficit
Inflation under
check
• Fiscal target of 4.1 % of GDP
• New excises on diesel and petrol
(revenue yield of about Rs 20,000
crores), reduced subsidies, and
expenditure compression will
ensure the commitment to discipline
• Global crude petroleum prices
and moderated gold imports help
• Current account deficit has
shrivelled from a peak of 6.7% of
GDP ( 2012-13) to an estimated
1.0% in the coming fiscal year
• Inflation has declined by over 6
percentage points since late 2013
• Lower crude helped in cooling of
inflation
• Currently Inflation is about 4%

6. 2015-16
Challenges Ahead
Challenges
Increasing
investment in
infrastructure
Decline in
manufacturing
Resource
crunch in view
of higher
devolution in
taxes to
states
Agricultural
income under
stress
Maintaining
fiscal
discipline

7. 2015-16
Key Achievments
Achievments
Financial Inclusion -
12.5 crores families
financially
mainstreamed in 100
days
Transparent Coal
Block auctions to
augment resources of
the States
Swachh Bharat is not
only a programme to
improve hygiene and
cleanliness but has
become a movement
to regenerate India
Game changing
reforms on the anvil:
• Goods and Service Tax
(GST)
• Jan Dhan, Aadhar and
Mobile (JAM) - for direct
benefit transfer

8. 2015-16
Team India Vision
House
• Housing for all - 2
crore houses in Urban
areas and 4 crore
houses in Rural areas
• Basic facility of 24x7
power, clean drinking
water, a toilet and
road connectivity
Infra upgrade
• Electrification of the
remaining 20,000
villages including off-
grid Solar Power- by
2020.
• Connecting each of
the 1,78,000 un-
connected habitation
with roads
• Communication
connectivity to all
villages
Health and
education
• Providing medical
services in each
village and city.
• Senior Secondary
School within 5 km
reach of every child,
while improving
quality of education
and learning
outcomes
Economic upgrade
• Increase irrigated
area, improve
efficiency of existing
irrigation systems,
and ensure farm
produce value
addition and pricing
• Make India, the
manufacturing hub of
the World through
Skill India and Make
in India Programmes

9. 2015-16
Farmy Army To The Rescue
• Address two major factors critical to agricultural production that of soil and water
• Ambitious Soil Health Card Scheme has been launched to improve soil fertility on a
sustainable basis
• Support to Agiculture Ministry‟s organic farming scheme – “Paramparagat Krishi
Vikas Yojana
Organic Soil
• Improving water use efficiency to provide RsPer Drop More Crop‟
• Support micro-irrigation, watershed development and the Pradhan Mantri Krishi
Sinchai Yojana
• States urged to chip in
Efficient
Water
• Hassle-free agriculture credit with a special focus on small and marginal farmers
• Rs25,000 crore to the corpus of Rural Infrastructure Development Fund (RIDF) set up
in NABARD; Rs15,000 crore for Long Term Rural Credit Fund; Rs45,000 crore for
Short Term Co-operative Rural Credit Refinance Fund; and Rs15,000 crore for Short
Term RRB Refinance Fund
Farm Finance
• National Agriculture Market for the benefit farmers
• Government to work with the States, in NITI, for the creation of a Unified National
Agriculture Market
National
market

10. 2015-16
Funding the Unfunded
MUDRA bank
• Micro Units Development
Refinance Agency
(MUDRA) Bank, with a
corpus of Rs20,000
crores, and credit
guarantee corpus of
Rs3,000 crores to be
created
• MUDRA Bank will be
responsible for
refinancing all Micro-
finance Institutions which
are in the business of
lending to small entities
of business through a
Pradhan Mantri Mudra
Yojana.
• Priority will be given to
SC/ST enterprises
Trade fund
• Need to improve the
liquidity in the MSME
sector significantly
• A Trade Receivables
discounting System
(TReDS) which will be an
electronic platform for
facilitating financing of
trade receivables of
MSMEs to be
established
• Postal network with
1,54,000 points of
presence spread across
villages to be used for
increasing access of the
people to the formal
financial system
Ease of finance
• Comprehensive
Bankruptcy Code of
global standards to be
brought in fiscal 2015-
16 towards ease of
doing business
• NBFCs registered with
RBI and having asset
size of Rs500 crore and
above may be
considered for
notifications as „Financial
Institution‟ in terms of the
SARFAESI Act, 2002

11. 2015-16
Socially Secure India
Life Insurance
• The Pradhan Mantri Jeevan Jyoti Bima Yojana which covers both natural and
accidental death risk of Rs2 lakhs. The premium will be Rs330 per year
Accident Insurance
• Pradhan Mantri Suraksha Bima Yojna will cover accidental death risk of Rs2 lakh for
a premium of just Rs12 per year
Pension
• Atal Pension Yojana to provide a defined pension, depending on the contribution
and the period of contribution
• Government to contribute 50% of the beneficiaries‟ premium limited to Rs1,000
each year, for five years, in the new accounts opened before 31st December 2015
Senior Citizen Welfare Fund
• Corpus will be used to subsidize the premiums of vulnerable groups such as old age
pensioners, BPL card-holders, small and marginal farmers and others
• Senior Secondary School within 5 km reach of every child, while improving quality
of education and learning outcomes

12. 2015-16
Matching Infrastructure with Ambition
• National Investment and Infrastructure Fund (NIIF), to be established with an annual
flow of Rs20,000 crores to it
• Tax free infrastructure bonds for the projects in the rail, road and irrigation sectors
Infra fund
• PPP mode of infrastructure development to be revisited and revitalised.
• In infrastructure projects major issue is rebalancing of risk. The sovereign will have to
bear a major part of the risk without absorbing it entirely
Track change
• Atal Innovation Mission (AIM) to be established in NITI to provide Innovation
• Promotion Platform involving academicians, and drawing upon national and
international experiences to foster a culture of innovation , research and
development. sum of Rs150 crore will be earmarked
Innovate
India
• (SETU) Self-Employment and Talent Utilization) to be established as Techno-financial
• incubation and facilitation programme to support all aspects of start-up business.
Rs1000 crore to be set aside as initial amount in NITI
Tech Start up
• 5 new Ultra Mega Power Projects, each of 4000 MW, in the Plug-and-Play mode
• Second unit of Kudankulam Nuclear Power Station will be commissioned in 2015-16
Mega
powered up

13. 2015-16
Financial Market ReVitalized
• Need to deepen Indian Bond market
• Public Debt Management Agency (PDMA) will bring both India‟s external borrowings
and domestic debt under one roof
Bond market
• To strengthen regulation of commodity forward markets and reduce wild speculation
merge the Forwards Markets Commission with SEBIFMC = SEBI
• Section-6 of FEMA to be amended through Finance Bill to provide control on capital
flows as equity will be exercised by Government in consultation with RBI.
• Thus Capital Account Controls moving from regulatory matter to policy matter
Fund Free
flow
• Proposal to create a Task Force to establish sector-neutral financial redressal agency
that will address grievance against all financial service providersRedress
• India Financial Code to be introduced soon in Parliament for consideration
• Vision of putting in place a direct tax regime, which is internationally competitive on
rates, without exemptions
New
financial
regime

14. 2015-16
Golden Investment
Monetising Gold
• Gold monetisation scheme to
allow the depositors of gold to
earn interest in their metal
accounts and the jewellers to
obtain loans in their metal
account to be introduced
• Sovereign Gold Bond, as an
alternative to purchasing metal
gold scheme to be developed
• Commence work on developing
an Indian gold coin, which will
carry the Ashok Chakra on its
face
Investment
• Foreign investments in Alternate
Investment Funds to be allowed.
• Distinction between different
types of foreign investments,
especially between foreign
portfolio investments and
foreign direct investments to be
done away with. Replacement
with composite caps
• A project development company
to facilitate setting up
manufacturing hubs in CMLV
countries, namely, Cambodia,
Myanmar, Laos and Vietnam

15. 2015-16
Will and Skill India
• National Skills Mission through the Skill Development and Entrepreneurship Ministry.
The Mission will consolidate skill initiatives spread across several Ministries and
allow us to standardize procedures and outcomes across 31 Sector Skill Councils
• Deen Dayal Upadhyay Gramin Kaushal Yojana to enhance the employability of
rural youth
Mission Skills
• A student Financial Aid Authority to administer and monitor the front-end all
scholarship as well Educational Loan Schemes, through the Pradhan Mantri Vidya
Lakshmi Karyakram
Easy Edu
loan
• An IIT to be set up in Karnataka and Indian School of Mines, Dhanbad to
be upgraded in to a full-fledged IIT
• New All India Institute of Medical Science (AIIMS) to be set up in J&K,
Punjab, Tamil Nadu, Himachal Pradesh and Assam
• A post graduate institute of Horticulture Research & Education is to be set
up in Amritsar
• 3 new National Institute of Pharmaceuticals Education and Research in
Maharashtra, Rajasthan & Chattisgarh and one institute of Science and
Education Research is to be set up in Nagaland & Orissa each.
• An autonomous Bank Board Bureau to be set up to improve the
governance of public sector bank
New Schools

16. 2015-16
Tax proposals

17. 2015-16
Tax Highlights
• Efforts on various fronts to implement GST from next year
GST coming
• No change in rate of personal income tax
Individual
tax same
• Proposal to reduce corporate tax from 30% to 25% over the next
four years, starting from next financial year
Lower
corporate
tax
• Rationalisation and removal of various tax exemptions and
incentives to reduce tax disputes and improve administrationEasy of tax

18. 2015-16
Themed Tax
Themes for
tax
proposals
Measures to curb
black money
Job creation through
growth revival 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
Stand alone
proposals to
maximise benefit
to the economy

19. 2015-16
Black Money Beware
Investigate
• Generation of black money
and its concealment to be
dealt with effectively and
forcefully
• Investigation into cases of
undisclosed foreign assets has
been given highest priority in
the last nine months
• Major breakthrough with
Swiss who agreed to:
• Provide information in
respect of cases
independently investigated
by IT department
• Confirm genuineness of
bank accounts and provide
non-banking information;
• Provide such information in
time-bound manner
• Commence talks for
automatic exchange of
information
New Black Money Law
• Evasion of tax in relation to
foreign assets - punishment of
rigorous imprisonment upto 10
years, non-compoundable,
penalty rate of 300%
• Non-filing of return/filing of
return with inadequate disclosures
to have a punishment of rigorous
imprisonment upto 7 years
• Undisclosed income from any
foreign assets to be taxable at
the maximum marginal rate
• Mandatory filing of return in
respect of foreign asset
• Entities, banks, financial institutions
including individuals all liable for
prosecution and penalty
• Concealment of income/evasion
of income in relation to a foreign
asset to be made a predicate
offence under PML Act, 2002.
• PML Act, 2002 and FEMA to be
amended to enable
administration of new Act on
black money
Track Black Money
• Benami Transactions
(Prohibition) Bill to curb
domestic black money to be
introduced
• Acceptance or re-payment of
an advance of Rs 20,000 or
more in cash for purchase of
immovable property to be
prohibited
• PAN being made mandatory
for any purchase or sale
exceeding Rupees 1 lakh
• Third party reporting entities
would be required to furnish
information about foreign
currency sales and cross
border transactions
• Provision to tackle splitting of
reportable transactions
• Leverage of technology by
CBDT and CBEC to access
information from either‟s
databases

20. 2015-16
Make in India
Investment fund easy
•Tax “pass through” to
be allowed to both
category I and category
II alternative investment
funds
REiTnalisation
•Rationalisation of
capital gains regime for
the sponsors exiting at
the time of listing of the
units of REITs and InvITs
•Rental income of REITs
from their own assets to
have pass through
facility
GAAR no roar
•General Anti Avoidance
Rule (GAAR) to be
deferred by two years
•GAAR to apply to
investments made on or
after 01.04.2017, when
implemented
Investment welcome
•Additional investment
allowance (@ 15%)
and additional
depreciation (@35%) to
new manufacturing units
set up during the period
01-04-2015 to 31-03-
2020 in notified areas
of Andhra Pradesh and
Telangana
Tech free flow
•Rate of Income-tax on
royalty and fees for
technical services
reduced from 25% to
10% to facilitate
technology inflow
Workmen addition
•Benefit of deduction for
employment of new
regular workmen to all
business entities and
eligibility threshold
reduced from 100 to 50
Lower Custom duty
•Basic Custom duty on
certain inputs, raw
materials, inter mediates
and components in 22
items, reduced to minimise
the impact of duty
inversion
•All goods, except
populated printed circuit
boards for use in
manufacture of ITA bound
items, exempted from SAD
•SAD reduced on import of
certain inputs and raw
materials
Powered up
•Additional depreciation @
20% is allowed on new
plant and machinery
installed by a
manufacturing unit or a unit
engaged in generation
and distribution of power

21. 2015-16
Ease of doing business – Minimum
Government Maximum Governance
Vodafone case tuned up
• Provision of indirect
transfers of assets in
India in the Income-
tax Act suitably
cleaned up
• Vodafone mishaps to
be avoided
Wealth tax abolished
• Wealth-tax replaced
with additional
surcharge of 2 per
cent on super rich
with a taxable
income of over Rs1
crore annually
TP threshold up
• Domestic transfer
pricing threshold limit
increased from Rs5
crore to Rs 20 crore
Dividend east
• Applicability of
indirect transfer
provisions to
dividends paid by
foreign companies to
their shareholders to
be addressed
through a
clarificatory circular
FIIs MAT no more
• MAT provisions for
FIIs, profits
corresponding to
their income from
capital gains on
transactions in
securities which are
liable to tax at a
lower rate, shall not
be subject to MAT
Service tax up
• Service-tax plus
education cesses
increased from
12.36% to 14% to
facilitate transition to
GST
Cut the red tape
• Online central excise
and service tax
registration will be
done in two working
days
• Digitally signed
invoices and
electronic records
allowed
Longer credit period
• Time limit for taking
CENVAT credit on
inputs and input
services is being
increased from six
months to one year
as a measure of
business facilitation

22. 2015-16
Swacch Bharat (Clean India)
Lets contribute
• 100% deduction
for contributions,
other than by
way of CSR
contribution, to
Swachh Bharat
Kosh and Clean
Ganga Fund
Cleaner Coal
• Clean energy
cess increased
from Rs100 to
Rs200 per metric
tonne of coal, etc.
to finance clean
environment
initiatives
Tax the plastic
• Excise duty on
sacks and bags
of polymers of
ethylene other
than for industrial
use increased
from 12% to
15%
Swachh Bharat Cess
• Enabling provision
to levy Swachh
Bharat cess at a
rate of 2% or
less on all or
certain services, if
need arises
Clean technology
• Services by common
affluent treatment
plant exempt from
Service-tax
Electronic vehicles
helped
• Concessions on
custom and excise
duty available to
electrically operated
vehicles and hybrid
vehicles extended
upto 31.03.2016

23. 2015-16
Benefits to middle class tax-payers
Transport allowance up
•Transport allowance
exemption is being
increased from Rs800 to
Rs1,600 per month
Health insured
•Limit of deduction of
health insurance
premium increased from
Rs15000 to Rs 25000,
for senior citizens limit
increased from Rs20000
to Rs30000
Elderly help
•Senior citizens of 80+
years, to be allowed
deduction of Rs 30000
towards medical
expenditures
•Deduction limit of Rs
60000 with respect to
specified decease of
serious nature enhanced
to Rs 80000
Pension
•Limit on deduction for
contribution to pension
fund and the new
pension scheme
increased from Rs 1 lakh
to Rs1.5 lakh
•Additional deduction of
Rs 50000 to the new
pension scheme u/s
80CCD
Yoga is charity
• Yoga to be included
within the ambit of
charitable purpose
under Section 2(15)
of the Income-tax
Act
Girl Child Account
• Investments in
Sukanya Samriddhi
Scheme is already
eligible for
deduction under
Section 80C
Life insurance tax free
• For the benefit of
senior citizens,
service tax
exemption will be
provided on
Varishta Bima
Yojana

24. 2015-16
Service tax: Recreation expensive
Entertainment expensive
• Service-tax to be levied
on service: access to
amusement facility,
entertainment events or
concerts, pageants, non
recoganised sporting
events
Fruits and ambulance cheaper
• Services of pre-
conditioning, pre-cooling,
ripening etc. of fruits and
vegetables
• All ambulance services
provided to patients
Safari cheaper
• 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
Government services
costlier
• Enabling provision
made to exclude all
services provided by
the Government or
local authority to a
business entity from
the negative list. Thus
taxable
Building ports expensive
• Service-tax
exemption to
construction, erection,
commissioning or
installation of original
works pertaining to
an airport or port
withdrawn
Agriculture tax free,
alcohol not
• Transportation of
agricultural produce
to remain exempt
from Service-tax
• Processes as job work
for production or
manufacture of
alcoholic liquor
taxable
Agent epensive
• Services provided by
a mutual fund agent
taxable
• Marketing agent of
lottery ticket taxable

25. 2015-16
Others
Trucks expensive
• Increase in basic
custom duty -
• Metallergical
coke from 2.5
% to 5%
• Tariff rate on
iron and steel
increased from
10% to 15%
• Tariff rate on
commercial
vehicle
increased from
10 % to 40%
Cameras cheaper
• Basic custom duty
on digital still
image video
camera with
certain
specification
reduced to nil.
LED cheaper
• Basic customs
duty reduced -
• Black Light Unit
Module for use
in the
manufacture of
LCD/LED TV
panels from
10% to Nil.
• Organic LED
(OLED) TV
panels from
10% to Nil
Telecom connected
• Basic customs
duty reduced -
• HDPE for use in
the manufacture
of
telecommunicati
on grade
optical fibre
cables from
7.5% to Nil

26. 2015-16
Overall Budget
• Non-Plan expenditure estimates for the Financial Year are estimated at Rs13,12,200
crore
• Plan expenditure is estimated to be Rs4,65,277 crore, which is very near to the R.E. of
2014-15
• Total Expenditure has accordingly been estimated at Rs17,77,477 crore
• The requirements for expenditure on Defence, Internal Security and other necessary
expenditures are adequately provided
• Gross Tax receipts are estimated to be Rs14,49,490 crore
• Devolution to the States is estimated to be Rs5,23,958
• Share of Central Government will be Rs9,19,842
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