Highlights of the 2016 Union Budget

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Following are the highlights of Union Budget 2016-17 that were presented by Finance Minister Arun Jaitley in Parliament:

Hightlights of Budget 2017-17
  • No change in personal Income Tax slabs
  • 4-month Compliance Window for domestic black money holders; tax, interest on them at 45 per cent
  •  Relief for tax payers who earn below Rs 5 lakh; ceiling of rebate u/s 87A raised to Rs 5,000 from Rs 2,000
  •  House rent deduction raised from Rs 20,000 to Rs 60,000.
  •  One-time dispute resolution scheme for retro tax cases, penalty, interest waived.
  •  High level committee headed by Revenue Secretary to oversee creation of fresh liability using retro tax law.
  •  Corporate Tax for new manufacturing units fixed at 25 per cent.
  •  Clean energy cess increased from Rs 200/ton to 400/ton on coal, lignite and peat.
  •  First home buyers to get addl deduction of Rs 50,000 on interest for loan up to Rs 35 lakh; cost of house should not be more than Rs 50 lakh.
  •  To achieve fiscal deficit of 3 per cent of GDP by (2017-18).
  •  Fiscal Deficit target 3.9 per cent in 2015-16, 3.5 per cent in 2016-17.
  •  Revenue Deficit to be 2.8 per cent in 2015-16.
  •  Current Account Deficit for 2015-16 at $14.4 billion or 1.4 per cent of GDP
  •  Forex reserves at highest at $350 billion.
  •  Budget lists 9 transformative pillars including doubling farm income by 2022, infrastructure, investment, reforms
  •  Highest ever allocation of Rs 38,500 cr for MGNREGA.
  •  Certain equipment for dialysis exempt from basic customs duty, excise CVD.
  •  Govt to circulate Model Shops and Establishment Bill, small retail shops may remain open for 7 days.
  •  100 per cent rural electrification by May 1, 2018.
  •  Govt to pay EPF contribution of 8.33 per cent of new employees for first 3 years.
  •  Start-ups to get 100 per cent tax exemption for 3 years except MAT which will apply from April 2016-2019.
  •  To give statutory status to Aadhaar programme
  •  Infrastructure outlay at Rs 2.21 lakh cr.
  •  Rs 35,984 crore earmarked for farmer welfare; to spend Rs 86,500 crore on irrigation in 5 years.
  •  Rs 20,000 crore irrigation fund to be set up under NABARD.
  •  Rs 2,000 crore for LPG connection to poor; scheme for MPG connection for women.
  •  Stand Up India allocated Rs 500 crore.
  •  Roads and highways allocation at Rs 55,000 crore; NHAI can issue tax free bonds.
  •  Long term capital gains for unlisted companies to be reduced from 3 to 2 years
  •  Rs 9,000 crore allocated to Swachh Bharat Abhiyaan
  •  Targets 10,000 km national highways, upgradation of 50,000 kms of state highways.
  •  Incentivise gas production from deep sea, other unutilised deep sources
  •  Rs 31,300 cr Infra Bonds to be issued by various agencies -- NHAI, IREDA, NABARD.
  •  Further relaxation of FDI rules in insurance, pension, stock exchanges, asset reconstruction companies.
  •  100 per cent FDI in food products made domestically
  •  Rs 25,000 cr for recapitalisation of PSU banks
  •  Department of Disinvestment renamed Department of Investment & Public Asset Management
  •  NITI Aayog to identify CPSEs for strategic sale
  •  To design framework for PSU bank consolidation
  •  To consider lowering govt stake in IDBI to below 50%
  •  Health insurance scheme to provide Rs 1 lakh per family
  •  Senior citizens to get additional healthcare cover of Rs 30,000 under the new scheme
  •  Comprehensive Code for providing specialised resolution mechanism for bankruptcy of banks/insurance firms
  •  To amend Companies Act for registration of firms in a day
  •  GAAR to be implemented from April 1, 2017.
  •  Legislation to deal with the menace of illicit deposit taking schemes
  •  Place of Effective Management rules deferred by a year.
  •  Withdrawal up to 40 per cent of the corpus at the time of retirement to be tax exempt in the case of NPS.
  •  Steps to re-vitalise Public-Private-Partnership mode.
  •  Public Utility (Resolution of Disputes) Bill to be introduced, Guidelines for renegotiation of PPP Concession Agreements.
  •  New credit rating system for infrastructure projects.
  •  Interest rate setting Monetary Policy Committee in 2016.
  • Krishi Kalyan Cess at 0.5 per cent on all taxable services from June 1, 2016
  •  Infrastructure cess at 1 per cent on small petrol, LPG, CNG cars, 2.5 per cent on diesel cars of certain capacity and 4% on other higher engine capacity vehicles, SUVs
  • Excise duties on various tobacco products other than beedi raised by about 10 to 15 per cent.
  •  RBI to facilitate retail participation in G-Secs
  •  New derivative products to be developed by SEBI
  •  PSU General Insurers to be listed in stock exchanges
  •  Review and rationalisation of Autonomous Bodies
  •  Amount sanctioned under Pradhan Mantri Mudra Yojana increased to Rs 1.80 lakh crore
  •  Govt to increase ATMs, micro-ATMs in post offices
  •  Service Tax to be exempted on general insurance schemes under NIRMAYA Scheme.
  •  DBT to be used to transfer subsidy on fertiliser in select districts on pilot basis
  •  Plan, non-Plan distinction to be done away with; a Committee to review FRBM
  •  Service tax on Single premium Annuity Policies reduced from 3.5 per cent to 1.4 per cent of the premium paid in certain cases
  •  10 per cent tax rate on income from worldwide exploitation of patents developed and registered in India by a resident
  •  NBFCs to get deduction of 5 per cent of its income in respect of provision for bad and doubtful debts
  •  Basic custom and excise duty on refrigerated containers reduced to 5 per cent and 6 per cent
  •  100 per cent deduction for profits in housing project for flats up to 30 sq metres in four metros; 60 sq mts in other cities, approved during June 2016 to March 2019 and completed in 3 years. MAT to apply.
  •  Agriculture credit target highest at Rs 9 lakh crore
  •  Unified agriculture market e-platform will be dedicated to the nation on the birthday of B R Ambedkar.

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