Union Budget 2016: Cheer to small tax payers, those living on rent

Government likely to strike a balance between industry and agricultural sector.

The Modi government has a herculean task of balancing the needs of agriculture and industry as Finance Minister Arun Jaitley presents his third and crucial Budget today.

Jaitley is expected to revise fiscal deficit framework in the Union Budget 2016 to increase public investment to give push to the economy and try to revive the private investment cycle.

There is speculation that Jaitley may hike service tax from 14.5 per cent to 16 per cent to garner resources at a time when tax collections are expected to fall.

As far as salaried class is concerned, Jaitley may increase the tax exemption limit marginally and rejig the tax slabs. He may give tax breaks for people to invest in equity markets.

LIVE Budget 2016 updates:

9.00 am: We have worked very hard on Budget-2016, under guidance of PM and FM Arun Jaitley, says Jayant Sinha, MoS Finance.

WATCH: Finance Minister Arun Jaitley and MoS Jayant Sinha at North Block #Budget2016https://t.co/FwLKluYv4O

— ANI (@ANI_news) February 29, 2016

9.15 am: Finance Minister Arun Jaitley and MoS Jayant Sinha leave for Rashtrapati Bhawan.

9.40 am: The Finance Ministry had decided to go green and print lesser number of copies of the Budget. The copies of the document would be available online once they are tabled in Parliament.

9.50 am: Arun Jaitley and MoS Jayant Sinha reached the Parliament with the customary briefcase.

10.00 am: Arun Jaitley met President Pranab Mukherjee for customary briefing ahead of the Budget presentation.

10.10 am: Prime Minister Narendra Modi reached the Parliament for cabinet meet, which is underway. External Affairs Minister Sushma Swaraj and Defence Minister Manohar Parrikar were also present for the cabinet meet.

10.30 am: Union Budget 2016 approved by the Cabinet as meeting ends.

11.00 am: Chaos prevailed in Parlaiment as Opposition members created ruckus ahead of the Budget presentation.

11.03 am: Arun Jaitley began his Budget speech in Parliament.

India has been hailed as the bright spot and that India's growth is extraordinarily high, Arun Jaitley pointed out. "Let us look at our achievement in comparison of the last three years. Growth of GDP has now accelerated to 7.6per cent."

Our external situation is robust, CAD has declined to USD 14.4 bn this year, will be 1.4 pc of GDP at the end of fiscal:

Farm, rural sector, infra, social sector to have more Government expenditure

Claiming that we had to work in an unsupportive global environment and obstructive political atmosphere, the Finance Minister said "We must strengthen firewalls against risks through structural reforms; rely on domestic market so that growth does not slow down."

Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana has been recorded.

Government will undertake 9-point reforms including steps to ensure ease of business in governance, fiscal discipline to ensure benefits for people.

Focussing on bankruptcy laws, Jaitley said that government will work to make such laws insolvent and will undertake significant reforms

Government will launch two schemes to promote organic farming and increase crop yield in rainfed areas.

“We must continue with the pace of economic reforms and policy initiatives to change the lives of our people for the better,” says Jaitley.

A record agricultural credit target of Rs 9 lakh crore in 2016-17 has been set. Rs 60,000 crore for recharging of ground water recharging is also in the pipeline.

A dedicated long-term irrigation fund would be created in NABARD with a corpus of Rs 20,000 cr. Meanwhile, Rs 19,000 cr has been allocated for Pradhan Mantri Gramin Sadak Yojana in 2016-17; in all, Rs 27,000 cr after state contribution.

More than 75 lakh people have given up LPG subsidy.

Digital literacy scheme to be launched to cover 6-cr additional rural households. Rs 87,765 cr has been allocated for rural development.

5,542 of 18,542 unelectrified villages have been electrified; govt committed to achieving 100 per cent electrification of villages by May 2018.

Rs 1000 cr provided for LPG connection to rural households in name of women; scheme to go on for 2 yrs to cover 5cr BPL households.

3,500 medical stores would be opened under Pradhan Mantri Jan Aushodi Yojana to make quality medicine available.

Government would provide Rs 500 crore for Stand Up India scheme.

A new health protection scheme would provide cover up to Rs one lakh per family; top up of Rs 35,000 for people above 60 years.

Certain parts of dyalsis machines would be exempt from all forms of customs duty and national dyalsis service programme to be launched in all district hospitals.

62 new Navodaya vidyalayas to be opened in next two years.

At least one crore youth would be skilled over next three years.

Government would create digital depository for school leaving certificates.

Rs 1.7K crore has been earmarked for 1500 multi-skill training institutes to train youths under Skill Development programme.

Govt to pay 8.33 pc towards employee pension fund.

Total outlay for infrastrucutre at Rs 2.21 lakh crore for 2016-17.

Rs 97,000 cr allocation for road sector including rural roads.

Government has allocated Rs 55,000 crore for roads and highways; total investment in road sector would be Rs 97,000 crore.

Abolition of permit law would be the medium-term goal in public transport, says Jaitley.

Rs 8000 crore provided for Sagarmala project.

2,000 kilometres of state highways would be converted into national highways.

160 airports and airstrips would be revived at a cost of Rs 50-100 crore each, says Jaitley.

Government preparing a comprehensive plan for nuclear power generation and allocation could be up to Rs 3,000 crore per annum.

Government considering to provide calibrated market freedom to new gas production from deep sea, ultra deep sea to boost stagnant domestic output.

Duty drawback scheme widened and deepened to include more products and countries.

A Public Utility Resolution of Disputes Bill to be passed to solve problems in infrastructure contracts, PPP and public utilities.

More FDI reforms proposed in insurance, pension, asset restructuring companies and stock markets.

A new credit rating system for infrastructure will be developed.

Government to bring new policy for strategic sale of CPSE assets.

Government to allow 100 per cent FDI through FIPB in marketing of food products produced and manufactured in India.

Department of Disinvestment to remain Department of Investment and Public Asset Management, says Jaitley.

A comprehensive bankruptcy code would be enacted as part offinancial sector reforms.

RBI Act to be amended to provide statutory backing for monetary policy framework and monetary policy committee (MPC).

SEBI to develop new derivatives products as well as products for corporate bond market, says Jaitley.

SEBI Act would be amended to provide for more benches for Securities Appellate Tribunal.

Rs 25,000 crore to be provided for recapitalisation of public sector banks.

Ceiling of tax rebate for tax payers with up to Rs 5 lakh annual come to be raised to Rs 5000 from Rs 2000 currently.

Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses. Relief will amount to Rs 3000 per annum; 1 cr tax payers to benefit.

Pre-emptive income tax scheme to be extended to all professionals with income of Rs 50 lakh with a presumption of 50 per cent profit.

The Banking Boards Bureau would be operationalised next fiscal, says Jaitley.

Accelerated depreciation to be limited to 40 pc wef from Apr 1, 2017 as part of phasing out of exemptions to industry.

Consolidation roadmap for public sector banks to be spelt next year; government open to reducing its stake in PSBs below 50 per cent.

Govt to increase ATMs, micro-ATMs in post offices in next three years.

In 2016-17, government eyes Rs 1,80,000 crore credit target through Mudra bank.

Target delivery of financial, other intermediary services would be introduced using Aadhar in this Budget session.

Service Tax would be exempted on general insurance schemes under NIRMAYA Scheme.

Govt to introduce bill to amend Companies Act for ease of doing business; to enable registration of companies in a day.

DBT to be used to transfer subsidy on fertilizer in select districts on pilot basis.

Service tax on single premium annuity to be reduced to 1.5 per cent from 3.5 per cent.

Govt would introduce bill to amend Companies Act for ease of doing business to enable registration of companies in a day.

Rs 900 cr provided to buffer fund created to moderate prices of pulses.

Fiscal deficit target for 2015-16 and 2016-17 retained at 3.9 per cent and 3.5 per cent respectively.

Revenue deficit target improved from 2.8 pc to 2.5 pc in current fiscal.

"Time has come to review the FRBM Act, a committee to be constituted for the purpose," says Jaitley

Govt would 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.

Govt to allocate Rs 100 crore each for celebrating birth anniversaries of Guru Gobind Singh and Deen Dayal Upadhyay.

New manufacturing companies incorporated after March 2016 would be given option of being taxed at 25 per cent plus cess plus surcharges.

Jaitley introduced one-time dispute resolution scheme for retro tax cases, payment of tax arrears which would lead to waiving of penalty and interest.

Plan and non-plan classification of Budget would be done away with from fiscal year 2017-18, says Jaitley.

Jaitley proposed to modify penalties scheme. He said, "Levying heavy penalty for non-payment of tax has led to high litigation."

Committed to implement General Anti-Avoidance Rule (GAAR) from April 1, 2017, says Jaitley.

Service tax exempted for General Insurance Schemes under Niramaya Swasthaya Bima Yojana.

Arun Jaitley accepted Rahul Gandhi's suggestion of giving tax exemption to Braille paper.

Dividend in excess of Rs 10 lakh per annum to be taxed at additional 10 per cent.

Rate of securities transaction tax would be raised from 0.017 per cent to 0.05 per cent.

Direct tax proposal to result in revenue loss of Rs 1060 crore; indirect tax proposals to raise Rs 20,670 crore; net gain of Rs 19,610 crore.

TDS provisions would be rationalised.

Non-resident Indians providing alternate documents would not be subject to higher tax rate.

Excise 1 per cent imposed on articles of jewellery excluding silver.

Pollution cess of 1 per cent on small petrol, LPG and CNG cars will be implemented; 2.5 per cent on diesel cars of certain specifications and 4 per cent on higher capacity vehicles.

Service tax to be exempted for construction of affordable housing upto 60 sq m under state and central housing schemes.

New grading system of imposing penalties to be introduced for under-reporting or concealment of income.

Tax on blackmoney declared would be 30 per cent plus 7.5 per cent penalty and 7.5 per cent surcharge.

Excise duty on Tobacco products increased by 10-15 per cent.

There would be limited tax compliance window from June 1 to September 30 for declaring undisclosed income.

One year limit provided for disposing of income tax cases relating to waiver of interest and penalty.

Domestic blackmoney holders to get a limited compliance window to declare undisclosed assets and escape prosecution.

11 new benches of Customs and Excise Services Appelate Tribunal to be introduced.

13 different cesses levied by different ministeries to be abolished.

Customs baggage rules for international travellers would be simplified.

Government to pay interest of 9 pc if there is delay in giving effect to an appellate order, says Jaitley.