India Finance Budget 2015 Highlights

Key announcements/ changes of Budget 2015:
 
·         CAD likely to be below 1.3% of GDP in FY 15
·         GST to be in place from 1 April 2016
·         CPI to remain 5% by the end of year
·         12.5cr bank accounts opened in Jan Dhan Yojana
·         Growth in 15-16 seen b/w 8 and 8.5%
·         Make in India to be the thrust of creating jobs in mfg sector
·         Total trf to states would be 62% of total receipts
·         Not rushing in for fiscal consolidation as this would not be pro-growth
·         Fiscal deficit – 3.9% for 15-16, 3.5% - 16-17, 3% for 17-18 against prev target of 2 yrs
·         1.25 lk cr of public investments
·         Aiming for well targeted system of subsidy delivery, rationalizing subsidies
·         25k cr for rural infra devp fund of NABARD
·         34,699 cr for MNREGA, if tax buoyancy permits another 5k cr
·         Electronic trade receivable discounting to be introduced for MSMEs
·         Comprehensive bankruptcy code in 15-16 as BIFR and CECA has failed
·         Creating a universal social security system
·         PM suraksha bima yojana to cover accident risk of 2 lakhs @ Rs 12/ per year
·         Atal pension yojana – govt to contribute 50% of premium subject to 1k per yr for 5 yrs
·         PM Jeevan Jyoti Bima Yojana – 2lac insu for Rs 330/ year
·         New scheme for physical aids and assisted living devices for sr citizens below poverty line
·         Infra – increased outlays on roads and railways – to prioritize completion of 1lc km roads
·         Capex of PSUs to be 3.18lk cr
·         Invest in infra up by 70kcr
·         National investment and infra fund trust to be set up
·         Tax free infra bonds for railways, roads and infra
·         1k cr for start-up support
·         Expert committee to prepare a draft legislation to replace multiple prior permissions for ease of doing business
·         5 4k MW power projects – all clearance to be in place before awarding projects
·         Fwd mks commission to be merged with SEBI
·         Task force to establish sector neutral financial grievances agency for addressing fin sector related grievances
·         Direct tax regime in line with international standards (w/o exemption and deductions) along with GST to be introduced
·         Gold monetization scheme – allow depositors earn interest in metal a/c
·         Develop alternate to gold metal – bond
·         Work on Indian gold coin to reduce demands of coins minted outside India
·         1k cr for Nirbhaya Fund
·         VISA on arrival to be increased from 43 countries to 150
·         2,46,727 cr for defence
 
Tax
 
·         Moving on various fronts for GST next year
·         Corporate tax rate to be reduced to 25% over next 4 yrs – to be accompanied with phased elimination and rationalization of exemptions
·         Exemptions to individuals to continue
·         Bill to be introduced to deal black money and to deal with the undisclosed foreign assets, key - 300% penalty, prosecution, 10 yrs imprisonment, no exemptions, tax max marginal rate
·         To encourage off shore fund mgrs – mere presence in India not to constitute PE
·         GAAR deferred by 2 years – to apply prospectively for investments on or after 1 April 2017
·         Royalty for FTS reduced to 10%
·         BCD reduced for certain imp RMs – 22 items
·         SAD exempted on certain IT products
·         Abolish wealth tax – addl 2% surcharge on income above 1cr
·         Information of assets of wealth tax return to be incl in income tax return
·         Concerns on taxability indirect transfers being addressed
·         Increase from 5cr to 20cr for TP
·         TARC recommendation in advanced stage
·         Edu cess and SHE cess would be subsumed in ED – ED rate rounded off to 12.5%
·         ED on footwear reduced
·         ED and ST reg in 2 working days, electronic
·         Time limit of 6m increased to 1 year for CCR availment
·         ST increased to 14% - Cesses subsumed in this rate
·         100% ded to Swach Bharat kosh contribution
·         Increase clean energy cess from 100 to 200 per MT of coal
·         ED on non industrial poly ethylene bags from 12 to 15
·         ST exempt on common affluent treatment plants
·         Exmption on hybrid vehicles extended up to 31 Mar 16
·         80D increased from 15k to 25k (health insurance), 30k for sr citizen, above 80 years – 30k deduction w/o health insurance
·         Exp on serious disease exp ded inc to 80k for sr citizen
·         NPS deduction – inc from 1L to 1.5L
·         Addl ded of Rs 50k for contribution under NPS u/s 80 CCD
·         Sukanya Smriti Scheme – ded u/s 80C, int on deposit exempt from tax
·         Transport Allowance exemption from 800 to 1600 p.m
·         ST exemption of varisht bima yojana
·         ST exmption to cold storages
·         Negative list to be pruned
·         2(15) to incl yoga for charitable purposes
·         DT proposals – loss of revenue of 8k cr

India Finance Budget 2015 Highlights

Excise rate 12.5% w.e.f. 01.03.15. Ed.cess abolished.  
Ser.Tax 14% ... effective date to be notified later.
Time limit for taking Cenvat credit ..one year.
Manpower service 100% service tax liability on corporate entities if services provided by Proprietary, partnership, HUF.