UNION BUDGET – 2015 - 16 INVESTMENT & TAXATION VIEW POINT.

UNION BUDGET – 2015 - 16INVESTMENT & TAXATION VIEW POINT

First government after 30 years, with a clear majority.

Growth & Development basis for majority.

Matured Indian Democracy.

Perform or you are out of power.

UNION BUDGET – 2015 – 16 – BACKDROP

Indian Economy in “Sweet Spot”


Better GDP Growth Outlook

Year Agriculture Industry Service GDP

2012 - 13 1.2 % 2.4 % 8.0 % 4.9 %

2013 - 14 3.7 % 4.5 % 9.1 % 6.6 %

2014 - 15 1.1 % 5.9 % 10.6 % 7.5 %



Inflation on decline

Year2012 – 13 2013 - 14 2014 - 15

Whole Sale Price Index (WPI) %

7.5 6.0 3.8

Consumer Price Index (CPI) %

9.1 9.5 7.0



Exports picking up

Year2012 - 13 2013 - 14 2014 - 15

Export Growth

- 1.8 % 4.1 % 4.6 %



Decline in Crude Oil Prices

Year

2013 2014 Present (as on 28-02-15)

Average Crude Oil Prices in US$

Brent Crude108.64 99.02 62.58

Source : www.eia.gov.in



Decline in Fiscal Deficit(as a % of GDP)

2012 - 13 2013 - 14 2014 - 15

4.8 4.5 4.1



Relatively stable Exchange Rate

1 Year Before Modi Government 54 - 68.50After Modi Government 58 - 63.50

US $ to INR

Source : www.rbi.org.in



Tax Collections are getting better(as a % of GDP)

2012 - 13 2013 - 14 2014 - 15Direct tax revenue 5.5 5.6 5.8

Indirect tax revenue

4.7 4.3 4.9



Subsidies on a decline(as a % of GDP)

2012 - 13 2013 - 14 2014 - 152.5 2.2 2.0



Savings (as a % of GDP)

2011 - 12 2012 - 13 2013 - 14 2014 - 15

33.9 31.1 30.0 29.6

Source : The Times of India, Ahmedabad



Sensex on the rise

March 2013 March 2014 February 2015

18836 22386 29220



India in the BRICS Pack


Indian Economy in “Sweet Spot”First time in recent history Indian GDP growth

rate to match up with China

UNION BUDGET – 2015 – 16

Budget Speech…


Targets announced in the Budget

CPI Inflation projected at 5% by the year end.

Fiscal deficit target after the year 2015 – 16 set at 3.9% of GDP.

GDP Growth in 2015 – 16 projected to be between 8 to 8.5%.


Important announcements in the Budget Speech

Goods & Services Tax to be operational from 01 – 04 - 2016


Goods & Services Tax

Amalgamation of large number of Indirect Central & State Taxes into a single tax.

Current tax burden on goods is estimated to be 25% - 30%.

GST would be applicable on supply of goods or services as against present concept of tax on the manufacture of or sale of goods or provision of services.


Goods & Services TaxIt would be a dual GST with the Center and the States simultaneously levying it on a common base. The GST to be levied by the Center would be called Central GST (CGST) and that to be levied by the States would be called State GST (SGST).

Central GST would replace the following taxes currently collected by the Center :

a) Central Excise Dutyb) Duties of Excise (Medicinal & Toilet Preparation)c) Additional Duties of Excise (Goods of Special Importance)d) Additional Duties of Excise (Textiles and Textile Product)e) Additional Duties of Customs (commonly known as CVD)f) Special Additional Duty of Customs (SAD)g) Service Taxh) Cesses and surcharges


Goods & Services Tax

State taxes that would be replaced by the State GST are :

a) State VATb) Central Sales Taxc) Luxury Taxd) Entry Tax (other than those in lieu of octroi)e) Entertainment Tax (not levied by the local bodies)f) Taxes on advertisementg) Taxes on lotteries, betting and gamblingh) State cesses and surcharges insofar as they relate

to supply of goods or services


Goods & Services TaxCredit of Central & State GST cannot be mixed.

A common threshold exemption would apply to both Central & State GST. Dealers with a turnover below it, would be exempt from tax.

Exports would be zero rated.

Integrated GST (IGST) would be levied on interstate supply of goods & services.

Import of goods or services would be treated as interstate supplies and would attract IGST & custom duties.



Direct Taxes Code (DTC) buried. Good features of DTC incorporated in Income Tax Act.

Wealth Tax abolished. 2% additional surcharge (totalling to 12% now) imposed on individual incomes above Rs. 1 Cr.



Gold deposit & loan accounts announced. Sovereign Gold Bond as an alternate to gold purchase.SBI Gold Deposit scheme already existent.

GAAR (General Anti Avoidance Rule) defered for 2 years, will not apply to investments made till 31-03-2017.



EPF & ESI to be revamped.

Pradhan Mantri Suraksha Bima Yojna to cover accidental death risk of Rs. 2 lacs for a premium just Rs. 12 per year.

Pradhan Mantri Jeevan Jyoti Bima Yojna to cover both natural and accidental death of Rs. 2 lacs at a premium of Rs. 330/- per year for the age group of 18 – 50 years.



Tax Free infrastructure bonds to be issued.

Comprehensive Bankruptcy Code of global standards.

Big NBFCs to get SARFAESI Act benefits.

Reduce tax rate on corporates and phase out deductions.



New law to address Undisclosed foreign assets. Imprisonment up to 10 years & penalty at the rate of 300%.

New law to tackle domestic black money, Benami Transactions (Prohibition) Bill.

Both laws to be introduced in current session of Parliament.



Provision to tackle splitting of reportable transactions. Quoting of PAN compulsory for Sale / Purchase above Rs. 1,00,000/-.

CBDT & CBEC to access information from each others data base.

Other provision to tackle black money in Income Tax.


Income Tax


Income TaxAdditional 2% surcharge on Individuals & HUFs where income exceeds Rs. 1 Cr.

Acceptance & Repayment of loans of Rs. 20,000/- or more in cash liable to penalty of equal amount. Provision extended to cash payment transaction for immovable property.

Tax disadvantages in Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (INVIT) removed. Now REIT and INVIT will become operational.


Income TaxDeduction U/s 80JJAA 30% of additional wages for 3 years. Deduction extended to non-corporate and employing 50 regular workmen.

Plant and machinery purchased by manufacturing unit is eligible 20% additional depreciation. If the same is put to use for less than and 180 days, under the amendment half of the additional depreciation which has not been allowed, shall be allowed in subsequent year.


Income TaxDeduction U/s 80CCD for contribution to Pension Fund provided at Rs. 50,000/- (without the over all cap with Deduction U/s 80C). National Pension Scheme (NPS) only recognised instrument.

Present Limit Proposed Limit1. Self & Family 15,000/= 25,000/=2. Parents 15,000/= 25,000/=3. HUF 15,000/= 25,000/=4. If anyone is a senior citizen

(above 60 years) in 1,2,3 above thanMedical Expenses of very senior citizens shall also be considered.

20,000/= 30,000/=

Deduction U/s 80D.


Income TaxForm 15G / 15H can be given for payments made towards insurance policies, which are chargeable to tax.

Deduction U/s 80DDB – Certificate from Doctor of Govt. Hospital, requirement relaxed. A separate limit for very senior citizen instituted at Rs. 80,000/-.

Books of accounts and documents seized in search, can be used in case of such other person also to whom it relates to.


Income TaxSec. 194 – C, Presently TDS not to be made if transporter provides PAN. w.e.f. 01/06/2015 the same is limited to transporters with 10 or less carriers.

No exemption of TDS from interest paid to members of co-operative society.

The employer shall seek evidence from employee for deductions claimed for arriving at TDS to be made U/s 192.


Impact of the BudgetEconomic Growth of the country is the priority of the government.

Investment cycle to restart.

The government will not do anything which will disturb the inflow of foreign capital.


Impact of the BudgetWe need to prepare our selves for GST.

Interest rates to soften in the year ahead.

The menace of Black money is under focused attack from the government.

Black money in Real Estate transaction on government focus.


Message


Thank you...

Questions?

UNION BUDGET – 2015 - 16 INVESTMENT & TAXATION VIEW POINT.

Documents

Transcript of UNION BUDGET – 2015 - 16 INVESTMENT & TAXATION VIEW POINT.