28 February 2015

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Important Facts Budget 2015 Know what is cheaper and costlier

Important Facts Budget 2015 Know what is cheaper and costlier

Finance Minister Arun Jaitley on Saturday announced a budget

The budget estimates for 2015-16 pegs the non-plan expenditure at Rs 13, 12,200 crore and plan spending at Rs 4, 65,277 crore. Total expenditure has been estimated at Rs 17, 77,477 crore.

Gross tax receipts are estimated to be Rs 14, 49,490 crore. Devolution to states will be Rs 5, 23,958 crore and states will get Rs 9, 19,842 crore. Non tax revenues are estimated at Rs 2, 21,733 crore.

The direct tax proposals will involve a revenue outgo of Rs 8,315 crore, the indirect tax proposals are expected to yield Rs 23,383 crore. The net impact of all tax proposals would be a revenue gain of Rs 15,068 crore.

Individual tax payer will benefit to the extent Rs 4, 44,200 from the exemptions announced

Following are the facts important things which matter from Budget 2015

Five percentage point cut in corporate tax over the next four years
Promised to cut corporate tax rate to 25% from 30% over the next four years,

Abolished wealth tax and replaced it with an additional two per cent surcharge on super-rich individuals
Levy of two per cent additional surcharge, the total surcharge on 'super-rich' individuals with an income of over Rs 1 crore, becomes 12 per cent as against 10 per cent now.

In the case of domestic companies having income between Rs 1 crore and Rs 10 crore, it will be seven per cent and 12 per cent for firms with income above Rs 10 crore.

Increasing service tax

No changes in personal and corporate income-tax rates for 2015-16
Corporation tax will go down to 25 per cent after a year

Increase the limit of deduction on health insurance premium from Rs 15,000 to Rs 20,000.

For senior citizens, it will go up from Rs 20,000 to Rs 30,000 and for those above 80 years, not covered by health insurance now, deduction of Rs 30,000 towards expenditure on medical treatment will be allowed.

Try to bring new law to stop the black money creation
A comprehensive piece of legislation that will make concealment of income and assets abroad a punishment with rigorous imprisonment of 10 years.
Stashing black money abroad will be made a non- compoundable offense, providing for a penalty of 300 per cent of tax on concealed income and assets. The concealed assets and income will be taxable at the maximum marginal rate and no deduction and exemptions will be allowed. It will be made a predicate offence.

Plan to introduce a new and comprehensive Benami Transactions (Prohibition) Bill in this session itself. The tough measures proposed under this law include jail up to 10 years for concealment of income and assets and evasion of tax in relation to foreign assets, and penalty at the rate of 300% of tax.

He made these offences non-compoundable, with offenders not being permitted to approach the Settlement Commission.

For two years   GAAR or general anti-avoidance rules will not be implemented

It decided to re-issue tax-free infra bonds

Announced introduction of a sovereign gold bond as an alternative to purchasing metal gold. The bond will carry a fixed rate of interest and will be redeemable in cash on the face value of gold.

In indirect taxes, the budget reduced basic customs duty on raw materials, excise duty on leather footwear

Excise duty on cigarettes is being increased by 25 per cent on cigarettes exceeding 65 mm length and by 15 per cent for cigarettes of other length.

Excise duty on variety of electronics and hardware goods has been reduced. This includes wafers of manufacture of IC for smart cards, mobile phones and inputs for use of LED drivers and LED lights.

Full deduction, other than CSR contributions, has been allowed for donations to Swachh Bharat and Clean Ganga Funds.

The Pradhan Mantri Jeevan Jyoti Bima Yojana will cover both natural and accidental death risk of Rs 2 lakh on a premium of Rs 330 per year for the age group 18-50.
Pradhan Mantri Suraksha Bima Yojana will cover accidental death risk of Rs 2 lakh for a premium of just Rs 12 per year

Atal Pension Yojana will provide a defined pension, depending on the contribution.

Set up a National Investment and Infrastructure Fund with annual flows of Rs 20,000 crore, and allowed infra bonds for investing in rail, road and irrigation projects.

Quoting PAN will be mandatory for all sale and purchase of over Rs 1 lakh

Increased deduction towards pension contribution to Rs 1.5 lakh from Rs 1 lakh now

Allowed extra deduction of Rs 50,000 towards New Pension Scheme and doubled transport allowance to Rs 1,600 a month.

Consolidated Service tax increased to 14%

Direct Taxes Code (DTC) dropped

 Rs 50,000 deduction for contribution to New Pension Scheme

100% tax exemption in CSR activities for Clean Ganga Fund and Swachh Bharat Kosh

Excise duty on footwear having retail price of more than Rs 1000 per pair reduced by 6 %:

Transport allowance exemption hiked to Rs 1,600, from Rs 800 per month

Defer the applicability of GAAR for 2 years; will only apply prospectively after Apr 2017:

Govt earmarks Rs 75 crore for electric vehicles in 2015-16

Propose to set-up an IT based student financial aid system under the PM Vidya Laxmi scheme

IIT in Karnataka and IIM in J&K and Andhra Pradesh to be set up; ISM Dhanabad will be upgraded to full IIT; AIIMS to be set up in J&K, Punjab, Tamil Nadu, Himachal Pradesh and Assam

Govt to do away with distinctions between FII and FDI and replace it with Composite Caps

FMC to be strengthened by merging with SEBI

Govt proposes to set up 5 ultra mega power projects, each of 4000 MW, will be plug and play projects:

FM proposes new scheme called Nayi Manzil to enable minority youth without school-leaving certificates to get employment

Existing tax slabs and Income Tax exemption limits continue unchanged.
Income tax exemption impact -
Individual Tax Payers up to the age of 60 years
Up to Rs 2, 50,000 - No tax
Rs 2, 50,001 to Rs 5, 00,000 - 10 per cent tax
Rs 5, 00,001 to Rs 10, 00,000 - 20 per cent tax
Above Rs 10, 00,000 - 30 per cent tax

Senior Citizens above 60 years -
Up to Rs 3, 00,000 - No tax
Rs 3, 00,001 to Rs 5, 00,000 - 10 per cent tax
Rs 5, 00,001 to Rs 10, 00,000 - 20 per cent tax
Above Rs 10, 00,000 - 30 per cent tax

All contributions to Sukanya Samridhi scheme to be tax free

Government today increased the service tax to 14 per cent from the current 12.36 per cent.

The service tax rate is being increased from 12 per cent plus education cesses to 14 per cent.

With the increase in service tax, the items which will be costly now are
Air conditioners,
Pan Masala,
Hospital bills,
Courier services,
Restaurant bills,
Laundry service,
Beauty parlor,
Cable TV,
Architect’s services,
Air travel,
Radio taxi travel,
AC bus travel,
Mobile phone bills,
Watching movies in multiplex,
IT products

Packaged fruits and vegetables will become cheaper as pre-cooling, ripening, retail packing and labelling of these items have been exempted from service tax.

Excise duty on locally made mobile phones, LED/ LCD panels, LED lights and LED Lamps have been cut.

Microwave ovens are likely to become cheaper as a key component, magnetron, has been exempted from basic customs duty as compared to 5 per cent earlier.

Refrigerator prices could also come down as import duty on various components have been reduced.

Solar water heater will be less expensive with excise duty on the item has been changed from 12 per cent to nil without CENVAT credit or 12.5 per cent with CENVAT credit.

Agarbattis prices will come down as it will now attract nil excise duty

Prices of pacemakers are expected to come down as specific materials used in its manufacturing have been exempted from duties.

Ambulance and ambulance services are also expected to come down as excise duty on chassis of such vehicle has been cut to 12.5 per cent from 24 per cent, while all ambulance services provided to patients are being exempted from service tax.
Plastic bags and sacks will also become costlier as tariff rate of excise duty has been hiked to 18 per cent from 12 per cent.

Cement will also become more expensive with excise duty being increased to Rs 1,000 per tonne from Rs 900 per tonne earlier.

Expensive – completely built imported commercial vehicles
As the effective basic customs duty has been hiked to 20 per cent from 10 per cent earlier.

Aerated, flavored drinks and packaged water will cost more as excise duty has gone up to 18 per cent from 12 per cent earlier.

Reality views by sm –

Saturday, February 28, 2015

Tags – Budget 2015 Tax Benefits


Destination Infinity February 28, 2015  

Budget looks interesting. Can you write more about the Gold bond, it might be useful for many as an investment option instead of investing in metal gold that one is not going to sell at all.

Destination Infinity

Kirtivasan Ganesan March 01, 2015  

It is a strict budget. People have been asked to tighten their belts.
I am sure people will tighten one hole more in their belt.