India’s Union Budget 2016-17 Highlights Arun Jaitley Budget PDF


India’s Union Budget 2016-2017 Highlights. Finance Minister Arun Jaitley arrived Rashtrapati Bhavan meets President Pranab Mukherjee with the Union Budget encased in a satchel likely to be red in color. The Union Cabinet will endorse the Budget at 10 am and Mr Jaitley will introduce it to Parliament at 11. Prime Minister Narendra Modi crave today’s budget plan is to address rural poor in India, authorities acquainted with his reasoning said, in a strategy move intended to help his party, the BJP’s prospects in vital state elections to be retained in short.

Highlights of Union Budget 2016-17

However, that will baffle financial investors while stock exchanges opened lower in front of Budget disclosure on Monday morning. Authorities told Reuters, the government is relied upon to expand spending on agriculture, social sectors and health that intend a change from its emphasis on infrastructure spending and market changes. In any case, the expanded social spending might climb nearly viewed fiscal shortage to 3.8 percent of GDP next financial related year from an objective of 3.5 percent, an official said. A week ago, the rupee drooped on reasons for alarm of a higher shortfall level. The finance ministry has guaranteed that the 2016-17 budget plan will be development oriented despite a worldwide atmosphere that shows up altogether more difficult than a year ago.

Union Budget 2016

Highlights of Union Budget 2016 Pdf Download

Today’s budget is anticipated to hinder criticism proceeding to key elections in midst farming states like West Bengal current year and Uttar Pradesh next year. Under Modi Government, the first two years focused on roads and railways as the expenditure welfare programmes concerned to design economic incitement. Financial Investors are searching for solid activities from PM Modi’s government to make it simpler to work together, with trusts it will move to improve an intricate tax administration seen as stopping speculators. Mr Jaitley has already sketched out his aim to decrease corporate tax from 30 to 25 percent before the following election, Monday is relied upon to be the first occasion when he lays out a core guide to achieve that objective. On Sunday Prime Minister Narendra Modi in his radio program Mann Ki Baat said,

“I have an exam as well. 125 crore Indians are going to test me, tomorrow is the Budget,” and wished school students for the board examinations that start tomorrow.

 Highlights of Union Budget 2016 Direct Tax

Introduction :

  • Growth of Economy accelerated to 7.6% in 2015-16.
  • India hailed as a ‘bright spot’ amidst a slowing global economy by IMF.
  • Robust growth achieved despite very unfavorable global conditions and two consecutive years shortfall in monsoon by 13%
  • Foreign exchange reserves touched highest ever level of about 350 billion US dollars.
  • Despite increased devolution to States by 55% as a result of the 14th Finance Commission award, plan expenditure increased at RE stage in 2015-16 – in contrast to earlier years.

Challenges in 2016-17 :

  • Risks of further global slowdown and turbulence.
  • Additional fiscal burden due to 7th Central Pay Commission recommendations and OROP.

Roadmap & priorities :

Focus on enhancing expenditure in priority areas of – farm and rural sector, social sector, infrastructure sector employment generation and recapitalisation of the banks.

Government to focus on

Focus on Vulnerable sections through:

  • Pradhan Mantri Fasal Bima Yojana
  • New health insurance scheme to protect against hospitalisation expenditure
  • facility of cooking gas connection for BPL families
  • Continue with the ongoing reform programme and ensure passage of the Goods and Service Tax bill and
    Insolvency and Bankruptcy law

Undertake important reforms by:

  • Giving a statutory backing to AADHAR platform to ensure benefits reach the deserving.

Agriculture and farmers’ welfare :

  • Allocation for Agriculture and Farmers’ welfare is Rs 35,984 crore
  • ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought
    under irrigation.
  • Implementation of 89 irrigation projects under AIBP, which are languishing for a long time, will be fast tracked
  • A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about Rs 20,000
  • Programme for sustainable management of ground water resources with an estimated cost of Rs 6,000 crore will
    be implemented through multilateral funding
  • 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure
    will be taken up under MGNREGA
  • Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.

Rural sector :

  • Allocation for rural sector – 87,765 crore.
  • 87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission
  • Every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission
  • A sum of 38,500 crore allocated for MGNREGS.
  • 300 Rurban Clusters will be developed under the Shyama Prasad 3

Social Sector Including Health Care :

  • Allocation for social sector including education and health care – 1,51,581 crore.
  • 2,000 crore allocated for initial cost of providing LPG connections to BPL families.
  • New health protection scheme will provide health cover up to One lakh per family.
  • For senior citizens an additional top-up package up to 30,000 will be provided.
  • 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.
  • ‘National Dialysis Services Programme’ to be started under National Health Mission through PPP mode “Stand Up India Scheme” to facilitate at least two projects per bank This will benefit at least 2.5 lakh entrepreneurs.
  • National Scheduled Caste and Scheduled Tribe Hub to be set up in partnership with industry associations Allocation of 100 crore each for celebrating the Birth Centenary of Pandit Deen Dayal Upadhyay and the 350th Birth Anniversary of Guru 4 Gobind Singh.

Education, skills and job creation :

  • 62 new Navodaya Vidyalayas will be opened
  • Sarva Shiksha Abhiyan to increasing focus on quality of education
  • Regulatory architecture to be provided to ten public and ten private institutions to emerge as world-class
  • Teaching and Research Institutions
  • Higher Education Financing Agency to be set-up with initial capital base of 1000 Crores
  • Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets to be set-up

Skill development :

  • Allocation for skill development – 1804. crore.
  • 1500 Multi Skill Training Institutes to be set-up.
  • National Board for Skill Development Certification to be setup in partnership with the industry and academia
  • Entrepreneurship Education and Training through Massive Open Online Courses

Infrastructure and investment :

  • Total investment in the road sector, including PMGSY allocation, would be 97,000 crore during 2016-17.
  • India’s highest ever kilometres of new highways were awarded in 2015. To approve nearly 10,000 kms of National Highways in 2016-17.
  • Allocation of 55,000 corer in the Budget for Roads. Additional 15,000 crore to be raised by NHAI through bonds.
  • Total outlay for infrastructure – 2,21,246 crore.

Fiscal discipline :

  • Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9% and 3.5%.
  • Revenue Deficit target from 2.8% to 2.5% in RE 2015-16
  • Total expenditure projected at 19.78 lakh crore
  • Plan expenditure pegged at 5.50 lakh crore under Plan, increase of 3%
  • Non-Plan expenditure kept at 14.28 lakh crores
  • Special emphasis to sectors such as agriculture, irrigation, social sector including health, women and child development, welfare of Scheduled Castes and Scheduled Tribes, minorities, infrastructure.
  • Mobilization of additional finances to the extent of 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority by raising Bonds.
  • Plan / Non-Plan classification to be done away with from 2017-18.
  • Every new scheme sanctioned will have a sunset date and outcome
  • Rationalized and restructured more than 1500 Central Plan Schemes into about 300 Central Sector and 30 Centrally Sponsored Schemes.
  • Committee to review the implementation of the FRBM Act. 8

Relief to small tax payers :

  • Raise the ceiling of tax rebate under section 87A from 2000 to 5000 to lessen tax burden on individuals with income upto 5 laks.
  • Increase the limit of deduction of rent paid under section 80GG from 24000 per annum to 60000, to provide relief to those who live in rented houses.

Make In India :

  • Changes in customs and excise duty rates on certain inputs to reduce costs and improve competitiveness of domestic industry in sectors like Information technology hardware, capital goods, defence production, textiles, mineral fuels & mineral oils, chemicals & petrochemicals, paper, paperboard & newsprint, Maintenance repair and overhauling [MRO] of aircrafts and ship repair.

Moving towards a pensioned society :

  • Withdrawal up to 40% 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% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 4.2016.
  • Limit for contribution of employer in recognized Provident and Superannuation Fund of 1.5 lakh per annum for taking tax benefit. Exemption from service tax for Annuity services provided by NPS and Services provided by EPFO to employees.
  • Reduce service tax on Single premium Annuity (Insurance) Policies from 5% to 1.4% of the premium paid in certain cases.

Promoting affordable housing :

  • Four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.
  • Deduction for additional interest of 50,000 per annum for loans up to 35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed 50 lakh

Resource mobilization for agriculture, rural economy and clean environment :

  • Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of 10 lakh per annum.
  • Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above 1 crore.
  • Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of ten lakh and purchase of goods and services in cash exceeding two lakh.
  • Securities Transaction tax in case of ‘Options’ is proposed to be increased from .017% to .05%.
    Excise duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewelry [excluding silver jewelry, other than studded with diamonds and some other precious stones], with a higher exemption and eligibility limits of 6 crores and 12 crores Excise on readymade garments with retail price of 1000 or more raised to 2% without input tax credit or 12.5%  with input tax credit.
  • ‘Clean Energy Cess’ levied on coal, lignite and peat renamed to ‘Clean Environment Cess’ and rate increased from 200 per tonne to 400 per tonne.
  • Excise duties on various tobacco products other than beedi raised by about 10 to 15%.

Providing certainty in taxation :

  • Committed to providing a stable and predictable taxation regime and reduce black money.
  • Domestic taxpayers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Declarations will have immunity from prosecution.
  • Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.
  • New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to 10 lakh. Cases with disputed tax exceeding 10 lakh to be subjected to 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty and tax interest on quantum addition.
    Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals).
    Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from 15 lakhs to 50 lakhs.
  • 11 new benches of Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

Simplification and rationalization of taxes :

  • 13 cesses, levied by various Ministries in which revenue collection is less than 50 crore in a year to be abolished.
  • For non-residents providing alternative documents to PAN card, higher TDS not to apply.
  • Revision of return extended to Central Excise assesses.
  • Additional options to banking companies and financial institutions, including NBFCs, for reversal of input tax credits with respect to non­taxable services.
  • Customs Act to provide for deferred payment of customs duties for 14 importers and exporters with proven track record.
  • Customs Single Window Project to be implemented at major ports and airports starting from beginning of next financial year.
  • Increase in free baggage allowance for international passengers. Filing of baggage only for those carrying dutiable goods.

Technology for accountability :

  • Expansion in the scope of e-assessments to all assesses in 7 mega cities in the coming years.
    Interest at the rate of 9% p.a against normal rate of 6% p.a for delay in giving effect to Appellate order beyond ninety days.
  • ‘e-Sahyog’ to be expanded to reduce compliance cost, especially for small taxpayers.


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