Union Budget 2016 highlights: Cheer to small tax payers, those living on rent

New Delhi: Finance Minister Arun Jaitley said that Financial Year 2017 would be challenging for government expenditure, as he presented his third Union Budget on Monday. Jaitley announced relief for small taxpayers who do not own a house nor get house rent allowance from employers.

Union Budget 2016 highlights:

• Government to pay interest of 9 pc if there is delay in giving effect to an appellate order, says Jaitley.
• Customs baggage rules for international travellers would be
  simplified.
• 13 different cesses levied by different ministeries to be abolished.
• 11 new benches of Customs and Excise Services Appelate Tribunal to be introduced.
• Domestic blackmoney holders to get a limited compliance window to declare undisclosed assets and escape prosecution.
• One year limit provided for disposing of income tax cases relating to waiver of interest and penalty.
• There would be limited tax compliance window from June 1 to September 30 for declaring undisclosed income.
• Excise duty on Tobacco products increased by 10-15 per cent.
• Tax on blackmoney declared would be 30 per cent plus 7.5 per cent penalty and 7.5 per cent surcharge.
• New grading system of imposing penalties to be introduced for under-reporting or concealment of income.
• Service tax to be exempted for construction of affordable housing upto 60 sq m under state and central housing schemes.
• Pollution cess of 1 per cent on small petrol, LPG and CNG cars will be implemented; 2.5 per cent on diesel cars of certain specifications and 4 per cent on higher capacity vehicles.
• Excise 1 per cent imposed on articles of jewellery excluding silver.
• Non-resident Indians providing alternate documents would not be subject to higher tax rate.
• TDS provisions would be rationalised.
• Direct tax proposal to result in revenue loss of Rs 1060 crore; indirect tax proposals to raise Rs 20,670 crore; net gain of Rs 19,610 crore.
• Rate of securities transaction tax would be raised from 0.017 per cent to 0.05 per cent.
• Dividend in excess of Rs 10 lakh per annum to be taxed at additional 10 per cent.
• Arun Jaitley accepted Rahul Gandhi's suggestion of giving tax
  exemption to Braille paper.
• Service tax exempted for General Insurance Schemes under Niramaya Swasthaya Bima Yojana.
• Committed to implement General Anti-Avoidance Rule (GAAR) from April 1, 2017, says Jaitley.
• Jaitley proposed to modify penalties scheme. He said, "Levying heavy penalty for non-payment of tax has led to high litigation."
• Plan and non-plan classification of Budget would be done
  away with from fiscal year 2017-18, says Jaitley.
• Jaitley introduced one-time dispute resolution scheme for
  retro tax cases, payment of tax arrears which would lead to waiving of penalty and interest.
• New manufacturing companies incorporated after March 2016 would be given option of being taxed at 25 per cent plus cess plus surcharges.
• Govt to allocate Rs 100 crore each for celebrating birth anniversaries of Guru Gobind Singh and Deen Dayal Upadhyay.
• Govt would spend Rs 19.78 lakh crore in 2016-17 - Rs 5.5 lakh crore under plan head, Rs 14.28 lakh crore under non-plan head.
• "Time has come to review the FRBM Act, a committee to be constituted for the purpose," says Jaitley.
• Revenue deficit target improved from 2.8 pc to 2.5 pc in
  current fiscal.
• Fiscal deficit target for 2015-16 and 2016-17 retained at 3.9 per cent and 3.5 per cent respectively.
• Rs 900 cr provided to buffer fund created to moderate prices of pulses.
• Govt would introduce bill to amend Companies Act for ease of doing business to enable registration of companies in a day.
• Service tax on single premium annuity to be reduced to 1.5 per cent from 3.5 per cent.
• DBT to be used to transfer subsidy on fertilizer in select districts on pilot basis.
• Govt to introduce bill to amend Companies Act for ease of
  doing business; to enable registration of companies in a day.
• Service Tax would be exempted on general insurance schemes under NIRMAYA Scheme.
• Target delivery of financial, other intermediary services would be introduced using Aadhar in this Budget session.
• In 2016-17, government eyes Rs 1,80,000 crore credit target through Mudra bank.
• Govt to increase ATMs, micro-ATMs in post offices in next three years.
• Consolidation roadmap for public sector banks to be spelt next year; government open to reducing its stake in PSBs below 50 per cent.
• Accelerated depreciation to be limited to 40 per cent with effect from April 1, 2017 as part of phasing out of exemptions to industry.
• The Banking Boards Bureau would be operationalised next fiscal, says Jaitley.
• Pre-emptive income tax scheme to be extended to all professionals with income of Rs 50 lakh with a presumption of 50 per cent profit.
• Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses. Relief will amount to Rs 3000 per annum; 1 cr tax payers to benefit.
• Ceiling of tax rebate for tax payers with up to Rs 5 lakh annual come to be raised to Rs 5000 from Rs 2000 currently.
• Rs 25,000 crore to be provided for recapitalisation of public sector banks.
• SEBI Act would be amended to provide for more benches for Securities Appellate Tribunal.
• SEBI to develop new derivatives products as well as products for corporate bond market, says Jaitley.
• RBI Act to be amended to provide statutory backing for monetary policy framework and monetary policy committee (MPC).
• A comprehensive bankruptcy code would be enacted as part of financial sector reforms.
• Department of Disinvestment to remain Department of Investment and Public Asset Management, says Jaitley.
• Government to allow 100 per cent FDI through FIPB in marketing of food products produced and manufactured in India.
• Government to bring new policy for strategic sale of CPSE assets.
• A new credit rating system for infrastructure will be developed.
• More FDI reforms proposed in insurance, pension, asset restructuring companies and stock markets.
• A Public Utility Resolution of Disputes Bill to be passed to solve problems in infrastructure contracts, PPP and public utilities.
• Duty drawback scheme widened and deepened to include more products and countries.
• Government considering to provide calibrated market freedom to new gas production from deep sea, ultra deep sea to boost
  stagnant domestic output.
• Government preparing a comprehensive plan for nuclear power generation and allocation could be up to Rs 3,000 crore per annum.
• 160 airports and airstrips would be revived at a cost of Rs 50-100 crore each, says Jaitley.
• 2,000 kilometres of state highways would be converted into national highways.
• Rs 8000 crore provided for Sagarmala project.
• Abolition of permit law would be the medium-term goal in public transport, says Jaitley.
• Government has allocated Rs 55,000 crore for roads and highways.
• Rs 97,000 crore allocation for road sector including rural roads.
• Total outlay for infrastrucutre at Rs 2.21 lakh crore for 2016-17.
• Govt to pay 8.33 per cent towards employee pension fund.
• Rs 1.7K crore has been earmarked for 1500 multi-skill training institutes to train youths under Skill Development programme.
• Government would create digital depository for school leaving certificates.
• At least one crore youth would be skilled over next three years.
• 62 new Navodaya vidyalayas to be opened in next two years.
• Certain parts of dyalsis machines would be exempt from all forms of customs duty and national dyalsis service programme to be launched in all district hospitals.
• A new health protection scheme would provide cover up to Rs one lakh per family; top up of Rs 35,000 for people above 60 years.
• Government would provide Rs 500 crore for Stand Up India scheme.
• 3,500 medical stores would be opened under Pradhan Mantri Jan Aushodi Yojana to make quality medicine available.
• Rs 1000 cr provided for LPG connection to rural households in name of women; scheme to go on for 2 years to cover 5cr BPL households.
• 5,542 of 18,542 unelectrified villages have been electrified; government committed to achieving 100 per cent electrification of illages by May 2018.
• Digital literacy scheme to be launched to cover 6-cr additional rural households. Rs 87,765 cr has been allocated for rural development.
• More than 75 lakh people have given up LPG subsidy.
• Rs 87,765 cr has been allocated for rural development.
• Government would develop 300 'rurban' clusters.
• Rs 850 crore has been allocated for animal husbandry, cattle and livestock breeding.
• Rs 2.87 lakh crore would be given as grants-in-aid to village panchyats and municipalities to boost rural economy.
• A dedicated long-term irrigation fund would be created in NABARD with a corpus of Rs 20,000 cr.
• Rs 9000 cr has been alloted to Swachch Bharat Mission.
• Rs 19,000 cr has been allocated for Pradhan Mantri Gramin Sadak Yojana in 2016-17; in all, Rs 27,000 cr after state contribution.
• Rs 38,500 cr has been allocated for MNREGA in 2016-17, the highest ever if entire amount is spent.
• Government has allocated Rs 5,500 crore for crop insurance scheme.
• States would be encouraged to take up decentralised procurement of foodgrains.
• 28.5 lakh hectares would be brought under irrigation under
  the Pradhan Mantri Krishi Sichai Yojana.
• A record agricultural credit target of Rs 9 lakh crore in 2016-17 has been set. Rs 60,000 crore for recharging of ground water recharging is also in the pipeline.
• “We must continue with the pace of economic reforms and policy initiatives to change the lives of our people for the better,” says Jaitley.
• Government will launch two schemes to promote organic farming and increase crop yield in rainfed areas.
• Focussing on bankruptcy laws, Jaitley said that government will work to make such laws insolvent and will undertake significant reforms.
• Government to enact a law to confer benefits on deserving sections on aadhar platform.
• Five lakh acres of land would be brought under Organic farming in three years under Krishi Vikas Yojana.
• Government keen provide incentive for deepwater gas exploration, says Jaitley.
• Next financial year would cast an additional burden due to implementation of 7th Pay Commission and OROP, says Jaitley.
• Government would undertake 9-point reforms including steps to ensure ease of business in governance, fiscal discipline to ensure benefits for people.
• Government to enhance expenditure for social, rural and agri
  sector.
• "We had to work in an unsupportive global environment and
  obstructive political atmosphere," says Jaitley.
• Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana has been recorded.
• Our external situation is robust, CAD has declined to USD
  14.4 bn this year, will be 1.4 pc of GDP at the end of fiscal, says the Finance Minister.
• Claiming that we had to work in an unsupportive global environment and obstructive political atmosphere, the Finance Minister said "We must strengthen firewalls against risks through structural reforms; rely on domestic market so that growth does not slow down."
• Farm, rural sector, infra, social sector to have more Government expenditure.
• "Global economy is in serious crisis, financial markets have been battered and trade contracted," says Jaitley.
• India has been hailed as the bright spot and that India's growth is extraordinarily high, Arun Jaitley pointed out. "Let us look at our achievement in comparison of the last three years. Growth of GDP has now accelerated to 7.6per cent."

11.03 am: Arun Jaitley began his Budget speech in Parliament.

11.00 am: Chaos prevailed in Parlaiment as Opposition members created ruckus ahead of the Budget presentation.

10.30 am: Union Budget 2016 approved by the Cabinet as meeting ends.

10.10 am: Prime Minister Narendra Modi reached the Parliament for cabinet meet, which is underway. External Affairs Minister Sushma Swaraj and Defence Minister Manohar Parrikar were also present for the cabinet meet.

10.00 am: Arun Jaitley met President Pranab Mukherjee for customary briefing ahead of the Budget presentation.

President Pranab Mukherjee with Finance Minister Arun Jaitley. (Photo: Twitter/Rashtrapati Bhawan)

9.50 am: Arun Jaitley and MoS Jayant Sinha reached the Parliament with the customary briefcase.

9.40 am: The Finance Ministry had decided to go green and print lesser number of copies of the Budget. The copies of the document would be available online once they are tabled in Parliament.

(Photo: Twiiter/ANI)

9.15 am: Finance Minister Arun Jaitley and MoS Jayant Sinha leave for Rashtrapati Bhawan.

9.00 am: We have worked very hard on Budget-2016, under guidance of PM and FM Arun Jaitley, says Jayant Sinha, MoS Finance.

Earlier on February 25, Union Railway Minister Suresh Prabhu presented the Rail Budget for 2016-17.

Prabhu said that the Rail Budget reflects the aspirations of the common people of India and it is inspired by Prime Minister Narendra Modi's vision to make railways the backbone of India's progress and economic development.