Jaitley’s third budget (Union Budget 2016-17) marked a strategic shift by addressing rural distress and also hiking public investment in India’s woeful infrastructure by 22.5%. The government unveiled a fire-fighting budget on Monday that seeks to win back support among rural voters for Prime Minister Narendra Modi’s government and sustain growth against a grim global backdrop – all without borrowing more.
Following are the highlights of the Union Budget for 2016-2017 presented by Union Finance minister Arun Jaitley today.
1. Fiscal deficit target for next year at 3.5 percent of GDP, promising to deal with tax evaders firmly and raising the prices of cigarettes as well as cars.
2. Jaitley targeted a total of $130 billion in credit to farmers.
4. Allocation for rural sector – Rs 87,765 crore.
5. Committed to stable taxation regime. No more retrospective amendments.
6. No Service Tax for houses built under 60 square metres.
7. For first time in history more than 1 lakh crore is allocated to development of roads.
8. Rs. 1,060 crore revenue loss through direct tax proposals, and Rs. 20,670 crore revenue gain through indirect tax proposals. Revenue gain of Rs 19,600 crore in Union Budget 2016 proposals.
9. If you are someone will receive dividends in excess of 10 lakhs, such dividends will now will be taxed in the hands of the individual.
10. Clean energy cess increased from Rs 200/ton to 400/ton on coal, lignite and peat.
11. Government to infuse 250 billion rupees capital into state-run banks in 2016/17; will find resources for additional capital for banks if required.
12. Now you will get the benefit of the new dispute resolution scheme. You get the chance to undo a few things you might have done wrong. In short, you can pay what you owe and you won’t have to pay any penalty if tax is up to Rs 10 lakh.
13. Excise duty on tobacco increased by 10-15 per cent.
14. 4% high capacity tax for SUVs.
15. Government of India will pay contribution of 8.33% for of all new employees enrolling in EPFO for the first three years of their employment. Budget provision of Rs 1000 crore for this scheme.
16. The Union Budget introduced a surcharge rise to 15% for incomes over Rs 1 crore
17. National Pension Scheme: Those who are looking forward to investing in the National Pension Scheme, will now be able to withdraw upto 40% tax free at the time of their retirement.
18. Allocation for skill development – Rs 1804. crore.
19. Total investment in the road sector, including PMGSY allocation, would be Rs 97,000 crore during 2016-17.