Union Budget 2016-17 & Its Impact

8/18/2019 Union Budget 2016-17 & Its Impact

1/18

“UNION BUDGET 2016 & ITS IMPACT

ANALYSIS”

Submitted B

M!d"u#i

$P1%10'

PGDM 201%(16

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TABLE OF CONTENT

• Introduction

• Agriculture & Farmer’s Welfare

• Rural Sector

• Social Sector Including Health Care

• Education, Skills and o! Creation

• Skill "e#elo$ment

• o! Creation

• Infrastructure and In#estment• Financial Sector Reforms

• %o#ernance and ease of doing !usiness

• Fiscal "isci$line

• Relief to small ta$a'er

• (oost em$lo'ment and gro)th

• *ake in India

• *o#ing to)ards an $ensioned societ'

• Promoting a+orda!le housing• Resource mo!iliation for agriculture, rural econom'

and clean en#ironment• Pro#iding certaint' in taation

• Sim$li-cation and rationaliation of taes

• .echnolog' & Accounta!ilit'

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INTRODUCTION

• %ro)th of Econom' accelerated to /012 in 34567510

• India hailed as a 8!right s$ot’ amidst a slo)ing glo!al

econom' !' I*F0• Ro!ust gro)th achie#ed des$ite #er' unfa#oura!le

glo!al conditions and t)o consecuti#e 'ears shortfall

in monsoon !' 592• Foreign echange reser#es touched highest e#er le#el

of a!out 964 !illion :S dollars0• "es$ite increased de#olution to States !' 662 as a

result of the 5;th Finance Commission a)ard, $lan

e$enditure increased at RE stage in 3456751 < in

contrast to earlier 'ears0

AGRICULTURE AND FARMER’S WELFARE

• Allocation for Agriculture and Farmers’ )elfare is =

96,>?; crore• 8Pradhan *antri @rishi Sinchai oBana’ to !e

im$lemented in mission mode0 3?06 lakh hectares )ill

!e !rought under irrigation0• Im$lementation of ?> irrigation $roBects under AI(P,

)hich are languishing for a long time, )ill !e fasttracked0

• A dedicated ong .erm Irrigation Fund )ill !e created

in DA(AR" )ith an initial cor$us of a!out = 34,444

crore0• Programme for sustaina!le management of ground

)ater resources )ith an estimated cost of = 1,444

crore )ill !e im$lemented through multilaterl funding0

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• 6 lakh farm $onds and dug )ells in rain fed areas and

54 lakh com$ost $its for $roduction of organic manure

)ill !e taken u$ under *%DRE%A0•

Soil Health Card scheme )ill co#er all 5; crore farmholdings !' *arch 345/0• 3,444 model retail outlets of Fertilier com$anies )ill

!e $ro#ided )ith soil and seed testing facilities during

the net three 'ears0• Promote organic farming through 8Parmparagat Krishi

Vikas Yojana’ and rganic Galue Chain "e#elo$ment

in Dorth East Region0• :ni-ed Agricultural *arketing ePlatform to $ro#ide a

common emarket $latform for )holesale markets0• Allocation under Pradhan Mantri Gram Sadak Yojana

increased to IDR 5>,444 crore0 Will connect remaining

16,444 eligi!le ha!itations !' 345>0• .o reduce the !urden of loan re$a'ment on farmers, a

$ro#ision of IDR 56,444 crore has !een made in the (E

345175/ to)ards interest su!#ention0• Allocation under Prime *inister Fasal (ima oBana =

6,644 crore0• IDR ?64 crore for four dair'ing $roBects 7 8Pashudhan

Sanjivani’, ‘Nakul Swasthya Patra’, ‘!Pashudhan "aat ’

and Dational %enomic Centre for indigenous !reeds0

RURAL SECTOR• Allocation for rural sector 7 = ?/,/16 crore0

• IDR 30?/ lakh crore )ill !e gi#en as %rant in Aid to

%ram Pancha'ats and *unici$alities as $er the

recommendations of the 5;th Finance Commission0• E#er' !lock under drought and rural distress )ill !e

taken u$ as an intensi#e (lock under the #$$n #ayal

%ntyodaya *ission0

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• A sum of IDR 9?,644 crore allocated for *%DRE%S0

• 944 Rur!an Clusters )ill !e de#elo$ed under the

Sh'ama Prasad ; *ukherBee Rur!an *ission0•

5442 #illage electri-cation !' 5st *a', 345?0• "istrict e#el Committees under Chairmanshi$ of

senior most ok Sa!ha *P from the district for

monitoring and im$lementation of designated Central

Sector and Centrall' S$onsored Schemes0• Priorit' allocation from Centrall' S$onsored Schemes

to !e made to re)ard #illages that ha#e !ecome free

from o$en defecation0• A ne) "igital iterac' *ission Scheme for rural India

to co#er around 1 crore additional household )ithin

the net 9 'ears0• Dational and Record *odernisation Programme has

!een re#am$ed0• De) scheme &ashtriya Gram Swaraj %'hiyan $ro$osed

)ith allocation of IDR 166 crore0

SOCIAL SECTOR INCLUDING HEALTHCARE

• Allocation for social sector including education and

health care


6/18

• Stand *p +ndia S)h$m$ to facilitate at least t)o

$roBects $er !ank !ranch0 .his )ill !ene-t at least 306

lakh entre$reneurs0•

Dational Scheduled Caste and Scheduled .ri!e Hu! to!e set u$ in $artnershi$ )ith industr' associations0• Allocation of = 544 crore each for cele!rating the (irth

Centenar' of Pandit "een "a'al :$adh'a' and the

964th (irth Anni#ersar' of %uru %o!ind Singh0

EDUCATION, SKILLS AND JOBCREATION

• 13 ne) Navodaya Vidyalayas )ill !e o$ened0

• Sarva Shiksha %'hiyan to increasing focus on Jualit'

of education• Regulator' architecture to !e $ro#ided to ten $u!lic

and ten $ri#ate institutions to emerge as )orld7class

.eaching and Research Institutions0• Higher Education Financing Agenc' to !e set7u$ )ith

initial ca$ital !ase of IDR 5444 Crores0• "igital "e$ositor' for School ea#ing Certi-cates,

College "egrees, Academic A)ards and *ark sheets to

!e set7u$0

SKILL DEVELOPMENT

• Allocation for skill de#elo$ment < IDR 5?4; crore0

• 5644 *ulti Skill .raining Institutes to !e set7u$0

• Dational (oard for Skill "e#elo$ment Certi-cation to

!e setu$ in $artnershi$ )ith the industr' and

academia0

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• Entre$reneurshi$ Education and .raining through

*assi#e $en nline Courses0

JOB CREATION

• %oI )ill $a' contri!ution of ?0992 for of all ne)

em$lo'ees enrolling in EPF for the -rst three 'ears of

their em$lo'ment0 (udget $ro#ision of IDR 5444 crore

for this scheme0• "eduction under Section ?4AA of the Income .a Act

)ill !e a#aila!le to all assesses )ho are su!Bect to

statutor' audit under the Act0• 544 *odel Career Centres to o$erational !' the end of

345175/ under Dational Career Ser#ice0• *odel Sho$s and Esta!lishments (ill to !e circulated

to States0

INFRASTRUCTURE AND INVESTMENT

• .otal in#estment in the road sector, including P*%S

allocation, )ould !e IDR >/,444 crore during 345175/0• India’s highest e#er kilometres of ne) high)a's )ere

a)arded in 34560 .o a$$ro#e nearl' 54,444 kms of DH

in 345175/0• Allocation of = 66,444 crore in the (udget for Roads0

Additional IDR 56,444 crore to !e raised !' DHAI

through !onds0• .otal outla' for infrastructure 7 IDR 3,35,3;1 crore0

• Amendments to !e made in *otor Gehicles Act to o$en

u$ the road trans$ort sector in the $assenger

segment0• Action $lan for re#i#al of unser#ed and underser#ed

air$orts to !e dra)n u$ in $artnershi$ )ith State

%o#ernments0

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• .o $ro#ide cali!rated marketing freedom in order to

incenti#ise gas $roduction from dee$7)ater, ultra

dee$7)ater and high $ressure7high tem$erature areas0•

Com$rehensi#e $lan, s$anning net 56 to 34 'ears, toaugment the in#estment in nuclear $o)er generation

to !e dra)n u$0• Ste$s to re7#italise PPPsK

o Pu!lic :tilit' LResolution of "is$utesM (ill )ill !e

introduced during 345175/0o %uidelines for renegotiation of PPP Concession

Agreements )ill !e issued0

o De) credit rating s'stem for infrastructure$roBects to !e introduced0

• Reforms in F"I $olic' in the areas of Insurance and

Pension, Asset Reconstruction Com$anies, Stock

Echanges0• 5442 F"I to !e allo)ed through FIP( route in

marketing of food $roducts $roduced and

manufactured in India0• A ne) $olic' for management of %o#ernment

in#estment in Pu!lic Sector Enter$rises, including

disin#estment and strategic sale a$$ro#ed0

FINANCIAL SECTOR REFORMS

• A com$rehensi#e Code on Resolution of Financial Firms

to !e introduced0• Statutor' !asis for a *onetar' Polic' frame)ork and a

*onetar' Polic' Committee through the Finance (ill

34510• A Financial "ata *anagement Centre to !e set u$0

• R(I to facilitate retail $artici$ation in %o#ernment

securities0• De) deri#ati#e $roducts )ill !e de#elo$ed !' SE(I in

the Commodit' "eri#ati#es market0

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• Amendments in the SARFAESI Act 3443 to ena!le the

s$onsor of an ARC to hold u$ to 5442 stake in the ARC

and $ermit non institutional in#estors to in#est in

Securitiation Recei$ts0• Com$rehensi#e Central egislation to !e !ought to

deal )ith the menace of illicit de$osit taking schemes0• Increasing mem!ers and !enches of the Securities

A$$ellate .ri!unal0• Allocation of IDR 36,444 crore to)ards reca$italisation

of Pu!lic Sector (anks0• .arget of amount sanctioned under Pradhan Mantri

Mudra Yojana increased to IDR 5,?4,444 crore0• %eneral Insurance Com$anies o)ned !' the

%o#ernment to !e listed in the stock echanges0

GOVERNANCE AND EASE OF DOING

BUSINESS

• A .ask Force has !een constituted for rationalisation of human resources in #arious *inistries0

• Com$rehensi#e re#ie) and rationalisation of

Autonomous (odies0• (ill for .argeted "eli#er' of Financial and ther

Su!sidies, (ene-ts and Ser#ices !' using the %adhar

frame)ork to !e introduced0•

Introduce "(. on $ilot !asis for fertilier0• Automation facilities )ill !e $ro#ided in 9 lakh fair

$rice sho$s !' *arch 345/0• Amendments in Com$anies Act to im$ro#e ena!ling

en#ironment for start7u$s0• Price Sta!ilisation Fund )ith a cor$us of IDR >44 crore

to hel$ maintain sta!le $rices of Pulses0• k harat Shr$shtha harat- $rogramme )ill !e

launched to link States and "istricts in an annual

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$rogramme that connects $eo$le through echanges

in areas of language, trade, culture, tra#el and

tourism0

FISCAL DISCIPLINE

• Fiscal de-cit in RE 3456751 and (E 345175/ retained at

90>2 and 90620• Re#enue "e-cit target from 30?2 to 3062 in RE 34567

510• .otal e$enditure $roBected at = 5>0/? lakh crore0

• Plan e$enditure $egged at = 6064 lakh crore under

Plan, increase of 560920• Don7Plan e$enditure ke$t at = 5;03? lakh crores0

• S$ecial em$hasis to sectors such as agriculture,

irrigation, social sector including health, )omen and

child de#elo$ment, )elfare of Scheduled Castes and

Scheduled .ri!es, minorities, infrastructure0•

*o!ilisation of additional -nances to the etent of =95,944 crore !' DHAI, PFC, REC, IRE"A, DA(AR" and

Inland Water Authorit' !' raising (onds0• Plan N Don7Plan classi-cation to !e done a)a' )ith

from 345/75?0• E#er' ne) scheme sanctioned )ill ha#e a sunset date

and outcome re#ie)0• Rationalised and restructured more than 5644 Central

Plan Schemes into a!out 944 Central Sector and 94

Centrall' S$onsored Schemes0• Committee to re#ie) the im$lementation of the FR(*

Act0

RELIEF TO SMALL TA$ PA%ERS

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• Raise the ceiling of ta re!ate under section ?/A from

IDR3444 to IDR6444 to lessen ta !urden on

indi#iduals )ith income u$to IDR 6 lakhs0•

Increase the limit of deduction of rent $aid undersection ?4%% from IDR 3;444 $er annum to IDR

14444, to $ro#ide relief to those )ho li#e in rented

houses0

BOOST EMPLO%MENT AND GROWTH

• Increase the turno#er limit under Presum$ti#e taation

scheme under section ;;A" of the Income .a Act to =

3 crores to !ring !ig relief to a large num!er of

assesses in the *S*E categor'0• Etend the $resum$ti#e taation scheme )ith $ro-t

deemed to !e 642, to $rofessionals )ith gross

recei$ts u$ to IDR 64 lakh0• Phasing out deduction under Income .aK

o Accelerated de$reciation )here#er $ro#ided in I.Act )ill !e limited to maimum ;42 from

50;0345/0o (ene-t of deductions for Research )ould !e

limited to 5642 from 50;0345/ and 5442 from

50;034340o (ene-t of section 54AA to ne) SEO units )ill !e

a#aila!le to those units )hich commence acti#it'

!efore 9509034340o .he )eighted deduction under section 96CC" for

skill de#elo$ment )ill continue u$ to 50;034340• Cor$orate .a rate $ro$osalsK

o De) manufacturing com$anies incor$orated on

or after 50903451 to !e gi#en an o$tion to !e

taed at 362 surcharge and cess $ro#ided the'

do not claim $ro-t linked or in#estment linked

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deductions and do not a#ail of in#estment

allo)ance and accelerated de$reciation0o o)er the cor$orate ta rate for the net -nancial

'ear for relati#el' small enter$rises i0e com$anies

)ith turno#er not eceeding IDR 6 crore Lin the

-nancial 'ear ending *arch 3456M, to 3>2 $lus

surcharge and cess0• 5442 deduction of $ro-ts for 9 out of 6 'ears for

startu$s setu$ during A$ril, 3451 to *arch, 345>0 *A.

)ill a$$l' in such cases0• 542 rate of ta on income from )orld)ide e$loitation

of $atents de#elo$ed and registered in India !' aresident0

• Com$lete $ass through of income7ta to securitiation

trusts including trusts of ARCs0 Securitisation trusts

reJuired to deduct ta at source0• Period for getting !ene-t of long term ca$ital gain

regime in case of unlisted com$anies is $ro$osed to !e

reduced from three to t)o 'ears0• Don7!anking -nancial com$anies shall !e eligi!le for

deduction to the etent of 62 of its income in res$ect

of $ro#ision for !ad and dou!tful de!ts0• "etermination of residenc' of foreign com$an' on the

!asis of Place of E+ecti#e *anagement LPE*M is

$ro$osed to !e deferred !' one 'ear0• Commitment to im$lement %eneral Anti A#oidance

Rules L%AARM from 50;0345/0• Eem$tion of ser#ice ta on ser#ices $ro#ided under

"een "a'al :$adh'a' %rameen @aushal'a oBana and

ser#ices $ro#ided !' Assessing (odies em$anelled !'

*inistr' of Skill "e#elo$ment & Entre$reneurshi$0• Eem$tion of Ser#ice ta on general insurance

ser#ices $ro#ided under 8Dirama'a’ Health Insurance

Scheme launched !' Dational .rust for the Welfare of

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13/18

Persons )ith Autism, Cere!ral Pals', *ental

Retardation and *ulti$le "isa!ilit'0• (asic custom and ecise dut' on refrigerated

containers reduced to 62 and 120

MAKE IN INDIA

• Changes in customs and ecise dut' rates on certain

in$uts to reduce costs and im$ro#e com$etiti#eness of

domestic industr' in sectors like Information

technolog' hard)are, ca$ital goods, defence

$roduction, tetiles, mineral fuels & mineral oils,

chemicals & $etrochemicals, $a$er, $a$er!oard &

ne)s$rint, *aintenance re$air and o#erhauling Q*R

of aircrafts and shi$ re$air0

MOVING TOWARDS A PENSIONED

SOCIET%

• Withdra)al u$ to ;42 of the cor$us at the time of

retirement to !e ta eem$t in the case of Dational

Pension Scheme LDPSM0 Annuit' fund )hich goes to

legal heir )ill not !e taa!le0• In case of su$erannuation funds and recognied

$ro#ident funds, including EPF, the same norm of ;42

of cor$us to !e ta free )ill a$$l' in res$ect of cor$uscreated out of contri!utions made on or from

50;034510• imit for contri!ution of em$lo'er in recognied

Pro#ident and Su$erannuation Fund of = 506 lakh $er

annum for taking ta !ene-t0 Eem$tion from ser#ice

ta for Annuit' ser#ices $ro#ided !' DPS and Ser#ices

$ro#ided !' EPF to em$lo'ees0

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• Reduce ser#ice ta on Single $remium Annuit'

LInsuranceM Policies from 9062 to 50;2 of the $remium

$aid in certain cases0

PROMOTING AFFORDABLE HOUSING

• 5442 deduction for $rofits to an undertaking in

housing $roBect for ats u$to 94 sJ0 metres in four

metro cities and 14 sJ0 metres in other cities,

a$$ro#ed during une 3451 to *arch 345> and

com$leted in three 'ears0 *A. to a$$l'0• "eduction for additional interest of =64,444 $er annum

for loans u$ to IDR 96 lakh sanctioned in 345175/ for

-rst time home !u'ers, )here house cost does not

eceed = 64 lakh0• "istri!ution made out of income of SPG to the REI.s

and IDGI.s ha#ing s$eci-ed shareholding )ill not !e

su!Bected to "i#idend "istri!ution .a, in res$ect of

di#idend distri!uted after the s$eci-ed date0

• Eem$tion from ser#ice ta on construction ofa+orda!le houses u$ to 14 sJuare metres under an'

scheme of the Central or State %o#ernment including

PPP Schemes0• Etend ecise dut' eem$tion, $resentl' a#aila!le to

Concrete *i manufactured at site for use in

construction )ork to Read' *i Concrete0

RESOURCE MOBILI'ATION FOR

AGRICULTURE, RURAL ECONOM%

AND CLEAN ENVIRONMENT

• Additional ta at the rate of 542 of gross amount of

di#idend )ill !e $a'a!le !' the reci$ients recei#ing

di#idend in ecess of = 54 lakh $er annum0

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15/18

• Surcharge to !e raised from 532 to 562 on $ersons,

other than com$anies, -rms and coo$erati#e societies

ha#ing income a!o#e = 5 crore0•

.a to !e deducted at source at the rate of 5 2 on$urchase of luur' cars eceeding #alue of IDR ten

lakh and $urchase of goods and ser#ices in cash

eceeding IDR t)o lakh0• Securities .ransaction ta in case of 8$tions’ is

$ro$osed to !e increased from 045/2 to 04620• EJualiation le#' of 12 of gross amount for $a'ment

made to non7residents eceeding IDR 5 lakh a 'ear in

case of (3( transactions0• @rishi @al'an Cess, T 4062 on all taa!le ser#ices,

)0e0f0 5 une 34510 Proceeds )ould !e eclusi#el' used

for -nancing initiati#es for im$ro#ement of agriculture

and )elfare of farmers0 In$ut ta credit of this cess )ill

!e a#aila!le for $a'ment of this cess0• Infrastructure cess, of 52 on small $etrol, P%, CD%

cars, 3062 on diesel cars of certain ca$acit' and ;2on other higher engine ca$acit' #ehicles and S:Gs0 Do

credit of this cess )ill !e a#aila!le nor credit of an'

other ta or dut' !e utilied for $a'ing this cess0• Ecise dut' of 852 )ithout in$ut ta credit or 53062

)ith in$ut ta credit’ on articles of Be)eller' Qecluding

sil#er Be)eller', other than studded )ith diamonds and

some other $recious stones, )ith a higher eem$tion

and eligi!ilit' limits of = 1 crores and = 53 crores

res$ecti#el'0• Ecise on read'made garments )ith retail $rice of =

5444 or more raised to 32 )ithout in$ut ta credit or

53062 )ith in$ut ta credit0• 8Clean Energ' Cess’ le#ied on coal, lignite and $eat

renamed to 8Clean En#ironment Cess’ and rate

increased from =344 $er tonne to =;44 $er tonne0

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16/18

• Ecise duties on #arious to!acco $roducts other than

!eedi raised !' a!out 54 to 5620• Assignment of right to use the s$ectrum and its

transfers has !een deducted as a ser#ice le#ia!le toser#ice ta and not sale of intangi!le goods0

PROVIDING CERTAINIT% IN TA$ATION

• Committed to $ro#iding a sta!le and $redicta!le

taation regime and reduce !lack mone'0• "omestic ta$a'ers can declare undisclosed income

or such income re$resented in the form of an' asset

!' $a'ing ta at 942, and surcharge at /062 and

$enalt' at /062, )hich is a total of ;62 of the

undisclosed income0 "eclarants )ill ha#e immunit'

from $rosecution0• Surcharge le#ied at /062 of undisclosed income )ill !e

called @rishi @al'an surcharge to !e used foragriculture and rural econom'0

• De) "is$ute Resolution Scheme to !e introduced0 Do

$enalt' in res$ect of cases )ith dis$uted ta u$ to =

54 lakh0 Cases )ith dis$uted ta eceeding IDR 54

lakh to !e su!Bected to 362 of the minimum of the

im$osa!le $enalt'0 An' $ending a$$eal against a

$enalt' order can also !e settled !' $a'ing 362 of the

minimum of the im$osa!le $enalt' and ta interest on

Juantum addition0• High e#el Committee chaired !' Re#enue Secretar'

to o#ersee fresh cases )here assessing oUcer a$$lies

the retros$ecti#e amendment0• ne7time scheme of "is$ute Resolution for ongoing

cases under retros$ecti#e amendment0

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17/18

• Penalt' rates to !e 642 of ta in case of

underre$orting of income and 3442 of ta )here

there is misre$orting of facts0•

"isallo)ance )ill !e limited to 52 of the a#eragemonthl' #alue of • in#estments 'ielding eem$t income, !ut not

eceeding the actual e$enditure claimed under rule

?" of Section 5;A of Income .a Act0• .ime limit of one 'ear for dis$osing $etitions of the

ta $a'ers seeking )ai#er of interest and $enalt'0• *andator' for the assessing oUcer to grant sta' of

demand once the assesse $a's 562 of the dis$uteddemand, )hile the a$$eal is $ending !efore

Commissioner of Income7ta LA$$ealsM0• *onetar' limit for deciding an a$$eal !' a single

mem!er (ench of I.A. enhanced from IDR 56 lakhs to

IDR 64 lakhs0• 55 ne) !enches of Customs, Ecise and Ser#ice .a

A$$ellate .ri!unal LCES.A.M0

SIMPLIFICATION AND

RATIONALI'ATION OF TA$ES

• 59 cesses, le#ied !' #arious *inistries in )hich

re#enue collection is less than IDR 64 crore in a 'ear

to !e a!olished0• For non7residents $ro#iding alternati#e documents to

PAD card, higher ."S not to a$$l'0• Re#ision of return etended to Central Ecise

assesses0• Additional o$tions to !anking com$anies and -nancial

institutions, including D(FCs, for re#ersal of in$ut ta

credits )ith res$ect to non7taa!le ser#ices0

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18/18

• Customs Act to $ro#ide for deferred $a'ment of

customs duties for im$orters and e$orters )ith

$ro#en track record0•

Customs Single Windo) ProBect to !e im$lemented atmaBor $orts and air$orts starting from !eginning of

net -nancial 'ear0• Increase in free !aggage allo)ance for international

$assengers0 Filing of !aggage onl' for those carr'ing

dutia!le goods0

TECHNOLOG% FOR ACCOUNTABILIT%

• E$ansion in the sco$e of e7assessments to all

assesses in / mega cities in the coming 'ears0• Interest at the rate of >2 $0a against normal rate of

12 $0a for dela' in gi#ing e+ect to A$$ellate order

!e'ond ninet' da's0• 8e7Sah'og’ to !e e$anded to reduce com$liance cost,

es$eciall' for small ta$a'ers0

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Union Budget 2016-17 & Its Impact

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Transcript of Union Budget 2016-17 & Its Impact