Union Budget Highlights 2016-17 in Simple terms
Today, Mr.Arun Jaitley, Finance Minister has presented Union Budget of 2016-17. There are no major positive things in this budget for an investor or for individuals. What are the key budget highlights of 2016-2017? What are the key measures Govt. of India proposed in this budget which would benefit the common man? Does an investor get benefitted out of this Budget of 2016-2017?
Key Budget Highlights 2016-17 in Simple terms
Finance Minister Arun Jaitley presented the Union Budget for 2016-17 indicating that Indian economy is on track. Here are the key highlights.
Budget highlights which affect in Personal Finance
- Unfortunately, no changes have been made to existing income tax slabs.
- Rs 1,000 Crores allocated for new EPF (Employees' Provident Fund) scheme.
- Good news for new employees who just started their career. Govt of India will pay EPF contribution of 8.33% for all new employees for first three years.
- HRA has been raised from Rs 24,000 per annum to Rs 60,000 per annum. This would benefit for individuals who are still in rented house.
- If you are new home loan borrower, additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh and where the cost of the house should not exceed Rs. 50 lakh.
- Exemption of Service tax for housing construction of houses less than 60 sq.meters
- Bad news for high income earning individuals. If you have income of over Rs 1 Crore, you need to pay 15% surcharge.
- Relief for small resident tax payers comes in the form of a tax rebate enhancement (under section 87A) from INR 2,000 to INR 5,000 with income not exceeding INR 5 lacs p.a.
NPS – Withdrawal up to 40 per cent of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS). Annuity fund which goes to legal heir will not be taxable.
In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40 per cent of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 1.4.2016.
Budget highlights which affects you directly or indirectly
- For tobacco products, excise duty has been raised from 10% to 15% (Other than beedis).
- If you are planning to buy a car of Rs 10 Lakh and above, you need to pay 1% service tax. Actually, I am planning to buy after this budget, it would affect me .
- If you are planning to purchase goods and services in cash for above Rs 2 Lakh, 1% service tax to be paid.
- For SUV’s, you need to pay 4% high capacity tax now.
- Govt. of India is opening limited tax compliance window from 1-Jun-2016 to 30-Sep-2016 for declaring undisclosed income. They need to pay 45% including surcharge and penalties.
- 1% Excise imposed on articles of jewellery, excluding silver.
- Pollution cess to be levied on all cars. It would be 1% on small petrol, LPG and CNG cars; 2.5% on diesel cars of certain specifications; 4% on higher-end model cars.
- If you are getting dividend from companies for over Rs. 10 lakh per annum, you need to pay additional 10% dividend tax.
Budget highlights that affect Banking sector
- Banking board bureau will be operationalized which would stand for public sector banks.
- Rs 25,000 crore towards recapitalisation of public sector banks.
- Target of disbursement under MUDRA increased to 1.8 Lakh Crores.
- Now, General Insurance companies can be listed in the stock exchange.
- Govt of India to increase ATMs, micro-ATMs in post offices in next three years.
Budget highlights on key initiatives / spending by Govt.
- Govt. of India would spend Rs 38,500 Crores for Mahathma Gandhi MGNREGA for 2016-2017.
- Allocation of Rs 9,500 Crs for Swacch Bharat Abhiyan.
- With respective state government support, govt of India would be launching new initiative to provide LPG gas to family of BPL.
- LPG connections to be provided under the name of women members of family, Rs 2000 Crs allocated for 5 years for BPL families.
- Increased allocation of Rs 2.87 lakh Crs grants to panchayats and municipalities which is a huge jump of over 230%.
Budget highlights on Healthcare
- Govt. of India is planning to launch 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.
- 300 generic drug store to be opened to strengthen Prime Minister Jan Aushadhi Yojana.
Budget highlights in Education sector
- 20 world-class public and private educational institutions (10 each) to be made.
- Digital repository to be created for school leaving certificates and diplomas courses and Rs. 1,000 crore for higher education financing.
- Set-up of 62 new navodaya vidyalayas to provide quality education.
- Objective to skill 1 Crore youth in the next 3 years under the PM Kaushal Vikas Yojna
Budget highlights in Energy sector
- Rs 3,000 Crores planned 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 deepwater gas exploration.
Budget highlights in Investments and infrastructure sector
- Planning for Rs 27,000 Crs to be spent on roadways.
- Good news about weekend shopping. Shops to be given option to remain open all seven days in a week across markets. You may need to find our several ways to be within budget while shopping.
- Govt. of India allocated Rs 55,000 Crores for roads & highways. Total allocation for road construction, including PMGSY, – Rs 97,000 crore
- Total infrastructure in Budget 2016 now stands at Rs. 2.21 Lakh crore
- 100% FDI in marketing of food products produced and marketed in India.
- MAT will be applicable for startups that qualify for 100% tax exemption
Budget highlights in Agriculture sector
- Total allocation for agriculture and farmer welfare at Rs 35,984 Crores.
- Over 28 lakh hectares of land will be brought under irrigation.
- Rs 60,000 Crores for recharging of ground water recharging.
- Rs 20,000 Crores allocated for dedicated irrigation fund in NABARD.
- Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojna.
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Union Budget Highlights 2016-17
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nice one suresh sir
Really good snopsis to view in one nut.
Thanks for the crisp detailing of the Budget.