Union Budget 2016-17

Highlights of Union Budget 2016-17


A.  TAX

Cess

• Infrastructure and Agriculture Cess to be levied
• Pollution Cess of 1 % on small petrol, LPG and CNG cars; 2.5 % on diesel cars of certain specifications; 4 % on higher-end models
• Krishi Kalyan Cess to be levied on all services - 0.5 %

Service Charge

• Service Charge on purchase of Luxury cars (over Rs. 10 lakh) - 1 %
• Service Charge on purchase of goods and services (over Rs. 2 lakh) in cash - 1 %

High-end Taxes

• High capacity tax for SUV cars - 4 %
• Companies with revenue less than Rs. 5 crore to be taxed at - 29 % + Surcharge
• Dividend in excess of Rs. 10 lakh per annum to be taxed at additional - 10 %

Excise Duty

• Excise Duty on tobacco products (except beedis) - raised from 10 % to 15 %
• Excise Duty on articles of jewellery (excluding silver) - 1 %

Tax Compliance Window

• Limited tax compliance window from June 1 - Sep 30 for declaring undisclosed income at - 45 % including surcharge and penalties

B.  PERSONAL FINANCE

Income Tax

• No change in existing Income Tax Slabs
• 15 % surcharge (raised from 12 %) on Income above Rs. 1 crore

EPF - Employees provident fund

• Rs. 1000 crore allocated for new EPF (Employees' Provident Fund) scheme
• Government will pay EPF contribution of 8.33 % for all new employees for first 3 years

Exemptions and benefits

• Deduction limit under Section 87A of I-T Act raised from Rs. 2,000 to Rs. 5,000 per annum (applicable to those with total income of less than Rs. 5 lakh)
• Relief for taxpayers who do not own a house and don't get house rent allowance (HRA) from employers. Under Section 80GG, deduction for rent paid will be raised from Rs. 24,000 to Rs. 60,000 per annum
• Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh (provided cost of house is not above Rs. 50 lakh)
• Service Tax exempted for construction of houses less than 60 square meter

C.  SOCIAL

Allocations

• MGNREGA for 2016-17 allocated - Rs. 38,500 crore
• Swacch Bharat Abhiyan alocated - Rs. 9,500 crore
• Hub to support SC / ST entrepreneurs 

LPG, cooking gas

• Government is launching a new initiative to provide cooking gas to BPL families with state support
• LPG connections to be provided under the name of women members of family - Rs. 2,000 crore allocated for 5 years for BPL families

Rural and Urban

• 2.87 lakh crore grants to Gram panchayats and municipalities - a quantum jump of 228 %
• 300 urban clusters to be set up under Shyama Prasad Mukherji Rurban Mission

Animal Welfare

• 4 schemes for animal welfare

D.  HEALTH

Dialysis

• 2.2 lakh renal patients added every year in India. Basis dialysis equipment gets some relief
• National Dialysis Service Program with funds through PPP mode to provide dialysis at all district hospitals

Health cover

• A new health protection scheme for health cover upto 1 lakh per family
• Senior Citizens will get additional healthcare cover of Rs. 30,000 under the new scheme

Generic drug store

• PM Jan Aushadhi Yojana to be strengthened, 300 generic drug store to be opened

E.  EDUCATION

• Scheme to get Rs. 500 crore for promoting entrepreneurship among SC / ST
• 10 public and 10 private educational institutions to be made world-class
• Digital repository for all school leaving certificates and diplomas.
• Rs. 1,000 crore for higher education financing
• Rs. 1,700 crore for 1,500 multi-skill development centers
• Digital literacy scheme to be launched to cover 6 crore additional rural households
• Entrepreneurship training to be provided across schools, colleges and massive online courses
• Objective to skill 1 crore youth in the next 3 years under the PM Kaushal Vikas Yojana
• National Skill Development Mission (NSDM) has imparted training to 76 lakh youth,

F.  ENERGY

• Rs. 3,000 crore earmarked for nuclear power generation
• Govt drawing comprehensive plan to be implemented in next 15-20 years for exploiting nuclear energy
• Govt to provide incentive for deep-water gas exploration
• Deep-water gas new disc to get calibrated market freedom, pre-determined ceiling price based on landed price of alternate fuels

G.  INVESTMENTS AND INFRASTRUCTURE

• Rs. 27,000 crore to be spent on roadways
• 65 eligible habitats to be connected via 2.23 lakh kms of road. Current construction pace is 100 kms / day
• Shops to be given option to remain open all 7 days in a week across markets
• Rs. 55,000 crore for roads and highways. Total allocation for road construction, including PMGSY - Rs. 97,000 crore
• India's highest-ever production of motor vehicles was recorded in 2015
• Total outlay for infrastructure in Budget 2016 now stands at Rs. 2,21,246 crore
• New greenfield ports to be developed on east and west coasts
• Revival of under-served airports. Center to partner with states to revive small airports for regional connectivity
• 100 % FDI in marketing of food products produced and marketed in India
• Dept. of Disinvestment to be renamed as Dept. of Investment and Public Asset Management
• Govt will amend Motor Vehicle Act in passenger vehicle segment to allow innovation
• MAT will be applicable for startups that qualify for 100 % tax exemption
• Direct Tax proposals result in revenue loss of Rs. 1,060 crore; Indirect Tax proposals result in gain of Rs. 20,670 crore

H.  AGRICULTURE

• Total allocation for agriculture and farmer welfare at Rs. 35,984 crore
• 28.5 lakh hectares of land will be brought under irrigation
• 5 lakh acres to be brought under organic farming over a 3 year period
• Rs. 60,000 crore for recharging of ground water as there is urgent need to focus on drought hit areas cluster development for water conservation
• Dedicated Irrigation Fund in NABARD of Rs. 20,000 crore
• Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana

I.  BANKING

• Banks get  - Rs. 25,000 crore towards recapitalization of Public Sector Banks. Banking Board Bureau will be operationalized. 
• Target of disbursement under MUDRA increased to 1.8 lakh crore
• Process of transfer of government stake in IDBI Bank below - 50 % started
• General Insurance companies will be listed in the stock exchange
• Govt to increase ATMs, micro-ATMs in Post Offices in next 3 years

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