Union Finance Minister Arun Jaitley presented Union Budget for fiscal year 2015-16 on 28 February 2015. Though there was much hype for the first Union Budget for BJP ruled government, but the outcome of this budget was more corporatized than for the common man. Here are the highlighted pros and cons of the budget.
Union Minister for Finance Shri Arun Jaitley on 28th February presented in Parliament the Union Budget 2015-16, with a focus on growth, promoting entrepreneurship and manufacturing, rationalizing tax regime and announcing some relief to common man.
P R O S
- Abolish of wealth tax
- Proposes to cut to 25 percent corporate tax over next four years
- Proposes to rationalise capital gains tax regime for real estate investments trusts
- Implement of GST (Goods and Service Tax) by April 2016
- Reducing of custom duties on 22 items
- Increases limit of deduction of health insurance premium from Rs 15,000/- to Rs 25,000/-; whereas limit for elderly raised from Rs 20,000/- to Rs 30,000/-
- Elderly aged above 80 years with no health insurance to be allowed deduction of Rs 30,000 as Medical expenses; additional deduction of Rs 25,000/- for the disabled
- Increase in deduction limit from Rs 1,00,000/- to Rs 1,50,000/- for contributors to Pension Fund and new Pension scheme; additional deduction of Rs 50,000/- for contribution to the new pension scheme u/s 80CCD
- Increase of Transport Allowance from Rs 800/- to Rs 1600/-
- Contribution to Sukanya Samridhi scheme will be tax free
- Proposes to introduce direct tax regime which will be internationally competitive on rates without exemptions
- Proposes tax-free infrastructure bonds for project in roads, rails and irrigation projects
- Proposes to launch gold deposit accounts and sovereign bonds
- Rate on Income-Tax on royalty and fees for technical services reduced from 25 percent to 10 percent
- Excise duty increased on cigarettes
- Excise duty on reduced to 6 percent on footwear with leather uppers, having retail price of more than Rs 1,000/- per pair
C O N S
- Additional 2 percent surcharge on super rich, with a taxable income of over Rs 1 crore annually
- Increase of Service Tax and Education Cess from 12.36 percent to 14 percent
- Quoting of PAN on purchases of Rs. 1 lakh and above made mandatory
- Commercial vehicle’s basic custom duty doubled to 20 percent
- No change in Personal Income Tax slab
- Increases import tax on Iron and Steel from 10 percent to 15 percent
- Increases import tax on metallurgical coke from 2.50 percent to 5 percent
- No change in gold import duty
Five major challenges:
Agricultural income under stress, increasing investment in infrastructure, decline in manufacturing, resource crunch in view of higher devolution in taxes to states, maintaining fiscal discipline.
To meet these challenges public sector needs to step in to catalyse investment, Make in India programme to create jobs in manufacturing, continue support to programmes with important national priorities such as agriculture, education, health, MGNREGA, rural infrastructure including roads.
Challenge of maintaining fiscal deficit of 4.1% of GDP met in 2014-15, despite lower nominal GDP growth due to lower inflation and consequent sub-dued tax buoyancy.
Agricultural income under stress, increasing investment in infrastructure, decline in manufacturing, resource crunch in view of higher devolution in taxes to states, maintaining fiscal discipline.
To meet these challenges public sector needs to step in to catalyse investment, Make in India programme to create jobs in manufacturing, continue support to programmes with important national priorities such as agriculture, education, health, MGNREGA, rural infrastructure including roads.
Challenge of maintaining fiscal deficit of 4.1% of GDP met in 2014-15, despite lower nominal GDP growth due to lower inflation and consequent sub-dued tax buoyancy.
Posted on: 01/03/2015 09:45:00 PM
Permalink :
