Meetesh Shiroya

INTRODUCTION :

As we expect more from Budget but once again we have to wait for another year where we can expect that more changes will be done as per our expectation and Tax Payer will be Happy.

As simple, the budget neither gives any benefits nor provide any special provision to the Tax Payer.

OBJECT COVERS :

There is no change in Income Tax Slab, however Finance Minister Arun Jaitley, has made provision for Tax rebate for those earning less than 5 lahk per annum and Under 5 lakh income – the rebate increased from 2000 to 5000 but tax payer has an expectation in increasing the present limit for Individual but no such things found in this budget so Tax Payer has to wait for another year where such things may happen in reality. Finance Minister Arun Jaitley, has increased the Surcharge by 15% on income tax for those with incomes exceeding 1 Crore per annum.

However, Mr. Jaitely is not providing the benefits to investor also. As per expectation of Investor they want to either Remove the STT or Reduce the Certain percentage of STT, but Mr. Jaitely has provide benefits by increasing the STT by 0.5 Percent. This is really surprising.

If as a tax payer look in the budget as an overall, it will not as per the expectation of Investor as well as Tax Payer.

Union Finance Minister Arun Jaitley, in his speech announced that the tax relief on House Rent Allowance (HRA) will be raised from Rs 24,000 per annum to Rs 60,000 per annum for those who don’t own house and pay rent.

However Certain Points need to be analyse as taxpayer expect from the Finance Minister and provide such move as, Mr. Jaitley is said that Companies Act to amended for ease of doing business; to enable registration of companies in a day, which we can say as a Great move towards ease of doing business. New Incentives for new manufacturing companies and smaller enterprise companies for development of Country. Increase in to limit from 1 to 2 Crore on small business assess in MSME category.

Finance Minister Arun Jaitley, has lower the corporation tax for small companies at 29% surcharge + Cess.

Now, Home Buyer Get a deduction of Rs. 50,000 for upto Rs. 35 Lakh Loan for the first time in budget, provided house coast not more than Rs. 50 Lakh.

Penalty to be 50% of tax in income under-reporting cases, 200% in misreporting of facts, which we can considered as a nice move taken by government.

National Pension scheme – withdrawal of 40% of corpus at time of retirement tax exempt which is beneficial to the Tax payer.

Finance Minister Arun Jaitley, has made an provision for new grading system of imposing penalties – on the basis of under reporting or concealment of income.

As we know that, Finance Minister Arun Jaitley has increased the Excise duty on Tobacco products by 10 to 15%.

And one good move towards easing of business is in increase of Scope of e-assessment to be expanded to 7 mega cities and Income tax department will expand e-sahyog to assist small taxpayers.

As we already know that Mr. Jaitely will provide benefits to Start UP project, has made an provision for Start-ups to get 100% tax exemption for 3 years except MAT which will apply from April 2016-2019.

Change in Levy of heavy penalty for nonpayment of tax has led to high litigation. Proposal made to modify the scheme for penalties.

A nice initiative in the area of Monetary limit for cases to be decided by 1-member bench up from 15 lakh to 50 lakhs, so there is the chances of speedy resolution of cases, and one more provision for establishment of 11 new benches of tax tribunals to reduce pendency. However it is too much necessary that their implementation is in good manner and fulfill the object.

As manufacturing sector required to be growing, so that’s why make provision for Incentives for new manufacturing companies and smaller enterprise companies.

However Finance Minister Arun Jaitley, has not changing the service tax rate but make an provision for Service tax exempted for housing construction of houses less than 60 sq metres, and Service tax on single premium annuity to be reduced to 1.5 percent from 3.5 percent.

A new exemption in Service tax for general insurance schemes under Niramayi Swasthya Bima Yojana.

Swatch Bharat gets Rs 9000 Crore.

One better move in the direction of Black Money which considered an important in Coming era that is Limited tax compliance window from Jun 1 – Sep 30 2016 for declaring undisclosed income at 45% including surcharge and penalties. There shall be no scrutiny or prosecution in this regard. So Mr. Jailey has tried to provide one step solution in this regard.

Increased in Cess of Clean energy cess from RS 200 per tonnne to 400 per tonnne on coal, lignite and peat.

Finance Minister Arun Jaitley initiated a move towards a low tax regime with non litigious approach, and Committed to provide a stable and predictable taxation regime.

Government will pay EPF contribution of 8.33% for all new employees for 1st three years for those with salaries up to Rs 1500 pm, gives Rs 1,000 Crore, To create new jobs, the government has decided to pay 8.33 per cent of wages to EPF on behalf of employers for workers during first three years of employment, and has given Rs 1,000 Crore for the same. The decision will be a big relief for employers as they are required to make mandatory contribution of 8.33 per cent of employees’ basic wage towards EPF.

PM Awas Yojna: 100% deduction for profits of undertakings from housing projects in cities during June 2016 – March 2019, MAT will apply for such undertakings.

As Make In India Project wants to Grow, Finance Minister Arun Jaitley has made an Suitable changes in customs and excise duty rates to improve competitiveness and boost Make In India Project.

Certain other Change from Finance Minister Arun Jaitley regarding Presumptive income of 8% Committed to increase investment in asset reconstruction companies, Special Patent Regime proposed to power innovation and research.

Finance Minister Arun Jaitley has committed to implementing GAAR from April 1, 2017.

Finance Minister Arun Jaitley provide Presumptive income tax scheme to all professionals with income of Rs 50 lakh with a presumption of 50 percent profit.

Finance Minister Arun Jaitley made provision for Accelerated depreciation to be limited to 40% wef from Apr 1, 2017.

Finance Minister Arun Jaitley has set fiscal target will be retained at 3.9 for 2015-16, and 3.5 for 2016-17.

Government stands firmly behind public sector banks Rs. 25k Crore for bank recapitalization, as per expectation of Bank and also the bank has already make proposal of Rs. 35K Crore but Mr. Jaitley provided Rs. 25K Crore only.

Government makes a step towards enactment of necessary amendments in the Motor Vehicles Act and open up the road transport sector in passenger segment.

As we have previously shown that, government will put a pressure for more use of AADAR Card, a bill on targeted delivery of financial services using Aadhar to be introduced. However -AADHAR number will not be considered as a proof of citizenship or domicile.

In SEBI Act to be amended to provide more benches on the Security Appellate Tribunal due to increased in Cases and speed up to resolve the Case. Comprehensive code of bankruptcy resolution of financial firms will be introduced as a bill in 2017.

Number of measures to be undertaken to deepen corporate bond market.

For easing of monetary policy, RBI Act being amended to provide statutory basis for monetary policy framework.

PM Mudra Yojna amount sanctioned has reached Rs 1 Lakh Crore, next year’s target is 1,80,000 Crore.

As increasing in use of ATM, nationwide of ATMS, micro-ATMs across the country should be required to be established.

As now exchange is a big platform for any Company so that, Finance Minister Arun Jaitley also look into this direction and make provision for General Insurance companies owned by the government will be listed in the stock exchanges.

Finance Minister Arun Jaitley has allotted Rs. 3000 Crore rupees earmarked for nuclear power generation.

For attracting Foreign Investment, Finance Minister Arun Jaitley  make provision for 100% FDI through FAPB route in marketing of food products produced and manufactured in India.

Finance Minister Arun Jaitley, Change the name of Department of Disinvestment to as Department of Investment and Public Asset Management.

As in the present era data is the main source for any business to be succeeds the Finance Minister Arun Jaitley, also take a step towards Financial Data Management Centre for integrated data collection and analysis.

New Medical Store around 3,500 to be opened under Pradhan Mantri Jan Aushodi Yojana, however it is great to watch the actual implementation of these things.

Finance Minister Arun Jaitley says that, Shops will be given an option to remain open on all seven days.

Finance Minister Arun Jaitley says that, 85% of stalled road projects back on track. Total of Rs 97000 Crore will be spend on roads and highways, Rs 218000 Crore investment in roads and railways in 2016-17, 10000 kms of national highways in 2016-17, Additional 50000 kms of state highways will be taken up for up gradation as national highway. Though all this things look good but we have to wait for their actual implementation and actual utilization.

Finance Minister Arun Jaitley provide Series of measures to modernize ports and 800 Crore for inland waterways, make an Action plan for revival of unserved and underserved airports also make provision for partnering with State Government to develop some of these airports to enhance regional connectivity.

Finance Minister Arun Jaitley says main Focus will be on quality education, 62 new Navodaya Vidyalas will be opened, Higher education financing agency will be set up with an initial capital of Rs 1000 Crore, Digital depository for school and college certificates will be set up, National skill development mission has trained 76 lakh youth, 1500 multi-skill institutes will be set up across the country, 1 Crore youth will be imparted skills in the next 3 years.

For Woman Empowerment Finance Minister Arun Jaitley says that LPG connection in the name of women members of poor connections, Rs 2000 Crore earmarked for the scheme, The mission will cover a total of 5 Crore BPL families, 75 lakh middle class and lower middle class have voluntarily given up subsidy on LPG.

New health protection scheme – cover of Rs 1 lakh per family, senior citizens will get an additional cover of Rs 30000.

For National dialysis service programme will be started to provide dialysis service in all district hospital certain dialysis will get tax subsidy.

For betterment of SC/ST a new ‘Stand up scheme’ to promote entrepreneurship in SC/ST and women, the scheme gets Rs 500 Crore, National hub will be created to help SC/ST entrepreneur.

New 300 urban clusters to be set up under Shyama Prasad Mukherji Rurban Mission.

Electrical Service to 5542 villages have been electrified Feb 23, 2016, this is more than the total combined achievement of the past three years, 100% electrification by May 1, 2018.

Finance Minister Arun Jaitley says that there is an need to spread digital literacy in rural areas, national digital literacy mission to cover 6 Crore rural households, Rs 87765 Crore for rural sector as a whole, which can be said as a innovative move towards digital literacy mission and it is also need of present era.

For Farmer a new platform of E-pashudhan Haat for connecting farmers and breeders of livestock, Honey production has been increased to 86500 mt tone.

Finance Minister Arun Jaitley has provided Rs 2.87 Lakh Crores as an aid to Gram Panchayats as recommended by Finance Commission, a jump of 128%, Average assistance of Rs. 80 lakh for Gram Panchayats, Rs 21 Crore for each local body.

For increasing demand in the field of Dairy products Finance Minister Arun Jaitley launched a new projects to be taken for dairy procurement, will issue animal health card, e-marketing portal for contacting breeders.

The major Contribution allocated by Finance Minister Arun Jaitley in MNREGA is amounted to Rs 38,500 Crore. Which will be highest amount spent on MNREGA.

CONCLUSION :

In Last, we can say that, Finance Minister Arun Jaitley has provide budget while considering the Public Money should reach the poor and deserving without any leakage, but it will happen only if there is proper system for implementation of budget, and is there then it can reward to the Tax Payer as a whole. Overall we can say that it is neither GOOD nor BAD for tax payer as well as Investor, but it is a FRUIT-FULL for Tax Payer and Investor.

(Author can be reached at meetesh.shiroya@gmail.com)

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