First reaction on Union Budget 2016-17

First reaction on Union Budget 2016-17

The finance minister has proposed the budget for financial year 2016-17 in the Lok Sabha today. However, it is very early to provide reaction without reading in detail about the budget. Overall it is balance budget and truly reflects to PM Modi’s vision of India’s growth.

In this budget, it has been clearly seen that government has totally focused towards rural economy and boosting infrastructure like highway, roads. It is very good that 20,000 crore has been allocated for irrigation. Irrigation is very vital thing for our county’s farmer and I myself come from farmer background can know its importance very well. It is very good step towards improve agriculture yields which directly benefit to farmer and our economy also.

Apart from irrigation there is 2.7 lakh crore allocated for village which is highest ever allocation in Indian budget history and 288% more from last year budget provision. By May 2018 all village would be electrified and all village roads connected with states both f these are very impressive mandate in this budget.

There are insurance scheme and LPG connection scheme for poor families. It shows the seriousness of the government for social sector. There is also scheme to open 3000 generic medical shop across India to provide medicine in cheap rate for common citizen.

There are many tax reform has been introduced in this budget which would make life easier of tax payers. There is no change in tax slab but introduce additional tax rebate of Rs 3000 up to Rs 5 lakh income slab. HRA limit has been increased from Rs 24,000 to Rs 60,000 which is big relief for employees. There is also additional Rs 50,000 tax exemption for first time home buyer within Rs 35 lakh loan provided the home cost within Rs 50 lakh.

There is minor hike in service tax earlier it was 14.5% and now it would be 15%. There is increase of tax on tobacco products except Bidi. There has been hiked in surcharge up to 15% for the income of above Rs 1 crore. The above Rs 10 lakh cars would be costly now.

The most important things are that FM has been stick on fiscal deficit target and no increment in non plan expenditure. It will increase govt’s credibility among foreign , institutional and domestic investors. There are many other points in budget which we will discuss in next article.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Union Budget: 2014-15

Union Budget: 2014-15

Overall budget is in positive direction and will support revival of economy. Our finance minister has kept positive direction for fiscal prudence by maintaining 4.1% fiscal deficit target and further reducing it for coming years. Budget is positive for sectors like Banking, Infra, Real Estate. FM has also given some respite to taxpayers by giving few reliefs like increase in lower exemption tax bracket, increasing the limit for investments under 80C, increasing the Deduction limit on account of interest on loan. All the above measures will leave more money in the hand of individuals. We are mentioning here the key points from the budget.

The fiscal deficit target for FY15 has been maintained at 4.1% and an ambitious target has been set for FY16 at 3.6% and FY17 at 3%.

• Retrospective tax rules have not been changed. All the cases will be scrutinized by high level committee.

• Personal Income-tax exemption limit raised by Rs. 50,000/- that is, from Rs. 2 lakh to Rs.2.5 lakh in the case of individual taxpayers, below the age of 60 years. Exemption limit raised from Rs.2.5 lakh to Rs.3 lakh in the case of senior citizens. 

• Investment limit under section 80C of the Income-tax Act has been raised from Rs.1 lakh to Rs.1.5 lakh.

• Deduction limit on account of interest on loan in respect of self occupied house property has been raised from Rs.1.5 lakh to Rs.2 lakh.

• To remove tax arbitrage, rate of tax on long term capital gains increased from 10% to 20 % on transfer of units of Mutual Funds, other than equity oriented funds.

• Incentives for Real Estate Investment Trusts (REITS) with complete pass through for the purpose of taxation and will support financing of real estate and real estate sector. A modified REITS type structure for infrastructure projects as the Infrastructure Investment Trusts (INVITS) attract long term finance from foreign and domestic sources including the NRIs.

• Requirement of the built up area and capital conditions for FDI to be reduced from 50,000 sq me to 20,000 sq m and from USD 10 mn to USD 5 mn respectively for development of smart cities.

• 10 year tax holiday extended to the undertakings which begin generation, distribution and transmission of power by 31.03.2017.

• Investment allowance at the rate of 15% to a manufacturing company that invests more than Rs.25 cr in any year in new plant and machinery. The benefit to be available for three years i.e. for investments upto 31.03.2017.

• FDI in insurance and defence sector has been increased upto 49% from current 26%.

• Target of NH construction of 8500 km will be achieved in current financial year.

• Excise duty increased from 12% to 16% on pan masala, from 50% to 55% on unmanufactured tobacco and from 60% to 70% on gutkha and chewing tobacco.

• Excise duty on cigarettes has been increased in the range of 11% to 72% across segments with higher burden on cigarettes with lower then 65 mm.

• Full exemption from excise duty is provided to various equipment and material used in solar plant.

• Central Excise duty on branded petrol is being reduced from 7.5 per litre to Rs 2.35 per litre.

• Excise duty reduced from 12% to 6% for footwear in price range from Rs 500 to Rs 1000. Footwear below Rs 500 is exempt from excise. And Footwear over Rs 1000 will continue to attract 12% Excise duty.

• Colour picture tubes have been exempted from basic customs duty to make cathode ray TVs cheaper and more affordable to weaker sections. To encourage production of LCD and LED TVs below 19 inches in India, basic customs duty on LCD and LED TV panels of below 19 inches has been reduced from 10 % to Nil.

FM has also mentioned lot of wish list in the budget relating to new urea policy, GST, capital for banks, 4% agriculture growth, coal supply, and power etc.

We will discuss further about impact of budget on the sectors. If you want more information regarding investment or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

www.artofinvest.com