Union Budget 2015-16 Highlights:  Finance Minister Arun Jaitley presented the general budget for 2015-16 in Parliament on 28th February. This is the first full-fledged budget of the Modi government. The 2015/16 budget is being billed as a “make-or-break” event for Prime Minister Narendra Modi’s eight-month-old government. There are a lot of expectations from the government which promised ‘Achche Din’ in its extensive electoral campaign last year. Here are the Highlights of Union Budget 2015-16.

Highlights of Union Budget 2015-16

Taxation:

To provide social safety net, pension, additional deduction of Rs.50,000 to be provided for new pension scheme

To raise limit of deduction of health insurance premium to Rs.25,000

100% tax deduction for Swachh Bharat, Clean Ganga schemes

To increase clean energy cess to Rs.200 per metric tonne of coal

To increase service tax plus education cess to 14%

To increase threshold for transfer pricing to Rs.20 crore

To increase excise duty to 12.5%; excise duty cut on leather footwear

To defer GAAR by two years

To reduce customs duty on 22 items

Rich and wealthy must pay more tax

To abolish wealth tax; Two percent additional surcharge on super-rich tax

To rationalize capital tax regime

Quoting of PAN number mandatory for any transaction over Rs.1 lakh

To allow tax pass-through for Alternative investment funds

Binami transaction prohibition bill to introduced in current session

To enact law to deal with black money stashed abroad

Strict measures including imprisonment, hefty fines to deal with tax evasion with regard to foreign assets

Corporate tax rate to be cut to 25% over next four years

To rationalize, remove exemptions for corporates over four years

Fight against black money to get stronger

GST expected to play transformative role

To modify permanent establishment norms

Considered as having high corporate tax regime

Transport allowance, which is currently Rs.800 per month, has been increased to Rs.1,600 per month

Growth

GDP growth seen at between 8 pct and 8.5 pct y/y

Aiming double digit growth rate, achievable soon

Expenditure: If revenue improves, hope to raise budgeted allocations for rural job scheme by 50 billion rupees in 2015/16

Subsidies: We are committed to subsidy rationalisation based on cutting leakages

Infrastructure

Investment in infrastructure will go up by 700 bln rupees in 2015/16 over last year

Plans to set up national investment infrastructure fund

Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects

Proposes 5 ultra mega power projects for 4,000 MW each

Second unit of Kudankulam nuclear power station to be commissioned in 2015/16

Will need to build additional 100,000 km of road

Ports in public sector will be encouraged to corporatise under Companies Act

Fiscal deficit

Fiscal deficit seen at 3.9 pct of GDP in 2015/16

Will meet the challenging fiscal target of 4.1 pct of GDP

Remain committed to meeting medium term fiscal deficit target of 3 pct of GDP

Current account deficit below 1.3 percent of GDP

Jaitley says have to keep fiscal discipline in mind despite need for higher investment

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