Jul 152019

Budget 2019 Highlights

Vision for the decade

  1. Vision statement:
    1. Building physical and social infrastructure;
    2. Digital India reaching every sector of the economy;
    3. Pollution free India with green Mother Earth and Blue Skies;
    4. Make in India with particular emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices;
    5. Water, water management, clean Rivers;
    6. Blue Economy;
    7. Space programmes,       Gaganyan,     Chandrayan      and Satellite programmes;
    8. Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables;
    9. Healthy society – Ayushman Bharat, well-nourished women & children. Safety of citizens;
    10. Team India with Jan Bhagidari. Minimum Government Maximum Governance.

5 Trillion Dollar Economy

  1. Connectivity is the lifeblood of an economy. The Government has given a massive push to all forms of physical connectivity through :
    1. Pradhan Mantri Gram Sadak Yojana,
    2. industrial corridors,
    3. dedicated freight corridors,
    4. Bhartamala and Sagarmala projects,
    5. Jal Marg Vikas and
    6. UDAN Schemes.

These initiatives will improve logistics tremendously, reducing the cost of transportation and increasing the competitiveness of domestically produced goods.

  1. As the world’s third largest domestic aviation market, the time is ripe for India to enter into aircraft financing and leasing activities from Indian shores. Government will implement the essential elements of the regulatory roadmap for making India a hub for such activities.
  1. Government will adopt suitable policy interventions to create a congenial atmosphere for the development of MRO in the county.
  1. During 2019, about 210 kms metro lines have been operationalized. With this, 657 kms of Metro Rail network has become operational across the country.
  1. The National Common Mobility Card (NCMC) standards, will enable people to pay multiple kinds of transport charges, including metro services and toll tax, across the country. This inter-operable transport card runs on RuPay card and would allow the holders to pay for their bus travel, toll taxes, parking charges, retail shopping and even withdraw money.
  1. The main objective of the FAME Scheme is to encourage faster adoption of Electric vehicles by way of offering upfront incentive on purchase of Electric vehicles and also by establishing the necessary charging infrastructure for electric vehicles.
  1. The Government will carry out a comprehensive restructuring of National Highway Programme to ensure that the National Highway Grid of desirable length and capacity is created using financeable model.
  1. As part of the Jal Marg Vikas Project for enhancing the navigational capacity of Ganga, a multi modal terminal at Varanasi has become functional in November 2018 and two more such terminals at Sahibganj and Haldia and a navigational lock at Farakka would be completed in 2019-20. This will make movement of freight, passenger cheaper and reduce our import bill.
  1. It is proposed to use Public-Private Partnership to unleash faster development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services.
  1. To take connectivity infrastructure to the next level, we will build on the successful model in ensuring power connectivity – One Nation, One Grid – that has ensured power availability to states at affordable rates.
  1. It is proposed that several reform measures would be taken up to promote rental housing. Current Rental Laws are archaic as they do not address the relationship between the Lessor and the Lessee realistically and fairly. A Model Tenancy Law will also be finalized and circulated to the States.
  1. Under the Interest Subvention Scheme for MSMEs, 350 crore has been allocated for FY 2019-20 for 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans.
  1. Government will create a payment platform for MSMEs to enable filing of bills and payment thereof on the platform itself.
  1. Encouraged by the overwhelming response, the Government of India has decided to extend the pension benefit to about three crore retail traders & small shopkeepers whose annual turnover is less than 5 crore under a new Scheme namely Pradhan Mantri Karam Yogi Maandhan Scheme. Enrolment into the Scheme will be kept simple requiring only Aadhaar and a bank account and rest will be on self-declaration.
  2. A number of measures are proposed to enhance the sources of capital for infrastructure financing:
  • A Credit Guarantee Enhancement Corporation for which regulations have been notified by the RBI, will be set up in 2019- 20.
  • An action plan to deepen the market for long term bonds including for deepening markets for corporate bond repos, credit default swaps etc., with specific focus on infrastructure sector, will be put in
  • It is proposed to permit investments made by FIIs/FPIs in debt securities issued by Infrastructure Debt Fund – Non-Bank Finance Companies (IDF-NBFCs) to be transferred/sold to any domestic investor within the specified lock-in
  1. Corporate Debt markets are crucial for the infrastructure sector. Given the need to further deepen bond markets, a number of measures are proposed to be taken up:-
  • To deepen the Corporate tri-party repo market in Corporate Debt securities, Government will work with regulators RBI/SEBI to enable stock exchanges to allow AA rated bonds as
  • User-friendliness of trading platforms for corporate bonds will be reviewed, including issues arising out of capping of International Securities Identification Number (ISIN).
  1. It is right time to consider increasing minimum public shareholding in the listed companies. I have asked SEBI to consider raising the current threshold of 25% to 35%.
  1. It is proposed to rationalize and streamline the existing Know Your Customer (KYC) norms for FPIs to make it more investor friendly without compromising the integrity of cross-border capital flows.
  1. It is propose to initiate steps towards creating an electronic fund raising platform – a social stock exchange – under the regulatory ambit of Securities and Exchange Board of India (SEBI) for listing social enterprises and voluntary organizations working for the realization of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund.
  1. It is propose to consolidate the gains in order to make India a more attractive FDI destination:

a. The Government will examine suggestions of further opening up of FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stake holders.
b. 100% Foreign Direct Investment (FDI) will be permitted for insurance
c. Local sourcing norms will be eased for FDI in Single Brand Retail

  1. In order to become part of the global financial system to mobilise global savings, government is contemplating organizing an annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as the anchor, to get all three sets of global players-top industrialists/corporate honchos, top pension/insurance/sovereign wealth funds and top digital technology/venture funds.
  1. It is propose to increase the statutory limit for FPI investment in a company from 24% to sectoral foreign investment limit with option given to the concerned corporates to limit it to a lower threshold. FPIs will be permitted to subscribe to listed debt securities issued by ReITs and InvITs.
  1. It is proposed to merge the NRI-Portfolio Investment Scheme Route with the Foreign Portfolio Investment Route.


  1. India has emerged as a major space power with the technology and ability to launch satellites and other space products at globally low cost. A Public Sector Enterprise viz. New Space India Limited (NSIL) has been incorporated as a new commercial arm of Department of Space to tap the benefits of the Research & Development carried out by ISRO. The Company will spearhead commercialization of various space products:
    1. Production of launch vehicles,
    2. transfer of technologies and
    3. Marketing of space products.

Grameen Bharat/Rural India

  1. By 2022, every single rural family, except those who are unwilling to take the connection will have an electricity and a clean cooking facility.
  1. Under Pradhan Mantri Awas Yojana – Gramin (PMAY-G) during 2019-20 to 2021-22, 1.95 crore houses are proposed to be provided to the eligible beneficiaries.
  1. Fishing and fishermen communities through a focused Scheme –
    1. the Pradhan Mantri Matsya Sampada Yojana (PMMSY) –

the Department of Fisheries will establish a robust fisheries management framework.

  1. Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI) aims to set up more Common Facility Centres (CFCs) to facilitate cluster based development to make the traditional industries more productive, profitable and capable for generating sustained employment opportunities.
  1. We will support private entrepreneurships in driving value-addition to farmers’ produce from the field and for those from allied activities, like Bamboo and timber from the hedges and for generating renewable energy.
  2. We also hope to form 10,000 new Farmer Producer Organizations, to ensure economies of scale for farmers over the next five years.
  1. Ensuring India’s water security and providing access to safe and adequate drinking water to all Indians is a priority of the Government.
    a. Constitution of the Jal Shakti Mantralaya – integrating the Ministry of Water Resources, River Development and Ganga Rejuvenation and Ministry of Drinking Water and Sanitation.
  1. Swachh Bharat Abhiyan has touched the very conscience of the nation besides bringing enormous health and environmental benefits. It is propose to expand the Swachh Bharat Mission to undertake sustainable solid waste management in every village.
  1. To bridge rural-urban digital divide, Bharat-Net is targeting internet connectivity in local bodies in every Panchayat in the country.

Shahree Bharat/Urban India

  1. It is propose to enhance the metro- railway initiatives by encouraging more PPP initiatives and ensuring completion of sanctioned works, while supporting Transit Oriented Development (TOD) to ensure commercial activity around transit hubs.


  1. The Government will bring in a New National Education Policy to transform India’s higher education system to one of the global best education systems.
  1. We propose to establish a National Research Foundation (NRF) to fund, coordinate and promote research in the country. NRF will ensure that the overall research eco-system in the country is strengthened with focus on identified thrust areas relevant to our national priorities and towards basic science without duplication of effort and expenditure.
  1. To prepare our youth to also take up jobs overseas, we will increase focus on skill sets needed abroad including language training. We will also lay focus on new-age skills like Artificial Intelligence (AI), Internet of Things, Big Data, 3D Printing, Virtual Reality and Robotics, which are valued highly both within and outside the country, and offer much higher remuneration.
  1. The Government is proposing to streamline multiple labour laws into a set of four labour codes.
  1. We propose to start a television programme within the DD bouquet of channels exclusively for start-ups.
  1. The Stand Up India Scheme has made human dignity and self- esteem go up. “Kayakave Kailasa”. The Ministry of Petroleum & Natural Gas has enabled SC/ST entrepreneurs in providing Bulk LPG Transportation. The synthesis between stand up and start up with commercial banks playing the catalyst has brought this transformational change.

Ease of Living

  1. The Pradhan Mantri Shram Yogi Maandhan Scheme aims at providing 3,000 per month as pension on attaining the age of 60 to crores of workers in unorganized and informal sectors.
  1. It is proposed to promote the use of solar stoves and battery chargers in the country.
  1. To make railway travel a pleasant and satisfying experience for the common citizen, we will launch a massive programme of railway station modernization this year.

Naari Tu Narayani/Women

  1. It is propose to expand the Women SHG interest subvention programme to all districts. Furthermore, for every verified women SHG member having a Jan Dhan Bank Account, an overdraft of 5,000 shall be allowed. One woman in every SHG will also be made eligible for a loan up to 1 lakh under the MUDRA Scheme.

India’s Soft Power

  1. It is propose to consider issuing Aadhaar Card for Non-Resident Indians with Indian Passports after their arrival in India without waiting for 180 days.
  1. It is propose to launch a Mission which will integrate our traditional artisans and their creative products with global markets. Wherever necessary we shall obtain patents and geographical indicators for them. With this aim, for the first time in this August House, I declare that we will launch a mission of linking creative industry with the economy and wherever it requires protecting Intellectual Property rights taking it to the National and International Market front.

Banking and Financial Sector

  1. NBFCs which do public placement of debt have to maintain a Debenture Redemption Reserve (DRR) and in addition, a special reserve as required by RBI, has also to be maintained.
  2. To bring more participants, especially NBFCs, not registered as NBFCs-Factor, on the TReDS platform, amendment in the Factoring Regulation Act, 2011 is necessary and steps will be taken to allow all NBFCs to directly participate on the TReDS platform.
  1. Regulation authority over the housing finance sector is shifted from NHB to RBI. Necessary proposals have been placed in the Finance Bill.
  1. New series of coins of One Rupee, Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, easily identifiable to the visually impaired, were released by the Hon’ble Prime Minister on 7th March, 2019. These new coins will be made available for public use shortly.
Feb 012017

Take Home of Budget F.Y. 2017-2018

  1. Income tax rates:

The long awaited expectation of lowering tax bill for honest tax payer comes to true. With the announcement of budget, the income of financial year 2017-18 (being taxed in assessment year 2018-19), will be charged at the rate of 5% instead of existing rate of 10%. Hence, the proposed slab rate will be as below:

Slab No Income slab Tax rate
(1) Up to Rs 250,000 Nil
(2) Up to Rs 500,000 5%
(3) Up to Rs 10,00,000 20%
(4) Above Rs 10,00,000 30%

With the proposed amendment, individual taxpayer having taxable income upto Rs 300,000 wouldn’t require to pay any tax or tax with lower rate. This can be understood with following table:

 Income Tax Rate Tax bill
Up to income Rs 250,000 Income will fall under slab (1) above and tax rate will be Zero Rs 0
For next Rs 50,000 Income will fall under slab (2) and taxed @ 5%, i.e, tax Rs 2500 (being 5% of Rs 50000).Since, upper cap limit of rebate u/s 87A is also revised adversely to Rs 350,000 from existing Rs 500,000. Hence, taxable income of Rs 300,000 will get rebate under section 87A and thus making net tax liability as NIL Rs 0
For any amount more than Rs 300,000 Income will be charged at 5% if fall under slab (2) above and benefit of sec 80C will be given if appropriate investment is made.Rebate to resident individuals u/s 87A having taxable income upto Rs 350,000 will continue to apply. Taxed @ 5%
  1. In order to lower the compliance burden of the above assessee it is proposed to introduce simplified one page return with online filing facility for person earning up to Rs 5 lakh from sources other than business income.
  1. Further, it is assured that there will not be any scrutiny in very first year of filling of return for individual falling under income group up to Rs 500,000 unless there is any information with department.
  1. Taxation on higher income group:

Under the existing system of taxation, surcharge subject to marginal relief is charged on income over and above Rs 1 crores. There is no change in this provision and thus, such tax payer will continue to pay surcharge @ 15%.

The provision of additional surcharge is proposed @ 10% on the individual having income between Rs 50 lakhs and Rs 1 crore.

  1. It is proposed to levy dividend distribution tax under sec 115BBDA @ 10% on dividend income exceeding Rs 10,00,000 on all resident persons unless registered under sec 12AA & 10(23C).
  1. Now gift of any movable and immovable property with consideration or inadequate consideration exceeding Rs 50,000/- will be taxable under sec 56.
  1. Now, it is proposed to apply provisions of TDS being application to individuals and HUFs not required to be audited to deduct TDS on rent paid in excess of Rs 50,000 per month.
  1. Set off of current year loss from House Property can be made in current year only up to Rs 200,000.
  1. It is proposed to levy fee in case return is filed late. This is in contrast with the existing penalty provisions. As for levy of penalty, proceeding needs to be initiated and sufficient opportunity of being heard needs to be given before recovery. Recovery of such fee will be automatic.
  1. Penalty will be levy on chartered accountant or merchant banker or registered valuer if they furnished incorrect information. Such penalty shall be Rs 10,000/- for each of such defaults.
  2. No person shall received payment of an amount Rs 3,00,000/- or more in cash from other person in a day or in respect of single transaction or in respect of one event or occasion. Such restriction shall not apply to following:
  • Government
  • Bank
  • Such other person or class of person as notify by central government
  • Such receipts as notify by central government
  1. TCS shall be collected at the higher rate in case collectee fails to furnish his PAN no to collected.
  1. Self employed individual and employee may get deduction upto 20% of gross total income if they contribute to national pension scheme.
Mar 022015

Highlights: Budget 2015

  • Fiscal deficit seen at 3.9 percent of GDP in 2015/16
  • Will meet the challenging fiscal target of 4.1 percent of GDP
  • Remain committed to meeting medium term fiscal deficit target of 3 percent of GDP
  • Current account deficit below 1.3 percent of GDP
  • Jaitley says have to keep fiscal discipline in mind despite need for higher investment
  • GDP growth seen at between 8 percent and 8.5 percent y/y
  • Nominal economic growth seen between 11 and 12 percent
  • Aiming double digit growth rate, achievable soon
  • Expects consumer inflation to remain close to 5 percent by March, opening room for more monetary policy easing
  • Monetary policy framework agreement with the RBI clearly states objective of keeping inflation below 6 percent
  • “One of the achievements of my government has been to conquer inflation. This decline in my view represents a structural shift.”
  • Revenue deficit seen at 2.8 percent of GDP
  • Non tax revenue seen at 2.21 trillion rupees
  • Agricultural incomes are under stress
  • Net receipts under market stabilisation scheme estimated at 200 billion rupees
  • Government targets 410 billion rupees ($6.7 billion) from stake sales in companies in 2015/16
  • Total stake sale in 2015/16 seen at 695 billion rupees
  • Sets stake sale target for 2016/17 at 550 billion rupees
  • Revises down stake sale target for 2014/15 to 313.5 billion rupees
  • Propose to merge commodities regulator with SEBI
  • To bring a new bankruptcy code
  • Jaitley says will move to amend the RBI act this year, and provide for a monetary policy committee
  • To set up public debt management agency
  • Proposes to introduce a public contract resolution of disputes bill
  • To establish an autonomous bank board bureau to improve management of public sector banks
  • To enact a comprehensive new law on black money
  • Propose to create a universal social security system for all Indians
  • To launch a national skills mission soon to enhance employability of rural youth
  • To raise visa-on-arrival facility to 150 countries from 43
  • Allocates 346.99 billion rupees for rural employment guarantee scheme
  • Raises threshold for application of transfer pricing rules to 200 million rupees from current 50 million rupees
  • Gross market borrowing seen at 6 trillion rupees
  • Net market borrowing seen at 4.56 trillion rupees
  • Government defers rollout of anti-tax avoidance rules GAAR by two years
  • GAAR to apply prospectively from April 1, 2017
  • Retrospective tax provisions will be avoided
  • To abolish wealth tax
  • Replaces wealth tax with additional 2 pct surcharge on super rich
  • Proposes to cut to 25 percent corporate tax over next four years
  • Corporate tax of 30 percent is uncompetitive
  • Net gain from tax proposals seen at 150.68 billion rupees
  • Jaitley proposes modification of permanent establishment norms so that the mere presence of a fund manager in India would not constitute a permanent establishment of the offshore fund, resulting in adverse tax consequences.
  • Proposes to rationalise capital gains tax regime for real estate investment trusts
  • Extends withholding tax concession on foreign debt purchases by two years
  • Expects to implement goods and services tax by April 2016
  • To reduce custom duty on 22 items
  • Basic custom duty on commercial vehicle doubled to 20 percent
  • Proposes to increase service tax rate and education cess to 14 percent from 12.36 percent
  • Plans to introduce direct tax regime that is internationally competitive on rates without exemptions
  • Exemptions for individual tax payers to continue
  • To enact tough penalties for tax evasion in new bill
  • Tax dept to clarify indirect transfer of assets and dividend paid by foreign firms
  • No revision of income tax brackets
  • Limit of deduction of health insurance premium increased to 25,000 rupees from 15,000 rupees; limit increased to 30,000 rupees from 20,000 rupees for the elderly
  • People aged above 80 and not covered by health insurance to be allowed deduction of 30,000 rupees for medical expenses
  • Additional deduction of 25,000 rupees for the disabled
  • Limit on deduction for contributions to pension fund and new pension scheme increased to 150,000 rupees from 100,000 rupees
  • Additional deduction of 50,000 rupees for contribution to new pension scheme under section 80CCD
  • Monthly transport allowance exemption doubled to 1,600 rupees
  • Import tax on iron and steel increased to 15 percent from 10 percent
  • Import tax on metallurgical coke increased to 5 percent from 2.5 percent
  • Investment in infrastructure will go up by 700 bln rupees in 2015/16 over last year
  • Plans to set up national investment infrastructure fund
  • Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects
  • Proposes 5 “ultra mega” power projects for 4,000 MW each
  • Second unit of Kudankulam nuclear power station to be commissioned
  • Will need to build additional 100,000 km of road
  • Ports in public sector will be encouraged to corporatise under Companies Act
  • Plan expenditure estimated at about 4.65 trillion rupees
  • Non-plan expenditure seen at about 13.12 trillion rupees
  • Allocates 2.46 trillion rupees for defence spending
  • Allocates 331.5 billion rupees for health sector
  • If revenue improves, hope to raise budgeted allocations for rural job scheme by 50 billion rupees
  • Government to provide 79.4 billion rupees capital infusion to state-run banks
  • Propose to do away with different types of foreign investment caps and replace them with composite caps
  • To allow foreign investment in alternative investment funds
  • Public investment needed to catalyse investment
  • To launch gold deposit accounts and sovereign bond
  • Import duty stays at 10 percent; disappoints jewellers
  • To work on Indian-made gold coin to cut imports
  • Raises excise duty on cigarettes by 25 percent for cigarettes of length not exceeding 65 mm
  • Raises excise duty by 15 percent for cigarettes of other lengths
  • Food subsidy seen at 1.24 trillion rupees
  • Fertilizer subsidy seen at 729.69 billion rupees
  • Fuel subsidy seen at 300 billion rupees
  • Major subsidies estimated at 2.27 trillion rupees
  • We are committed to subsidy rationalization based on cutting leakages
Jul 172014



1. Increase in Exemption Limit

a. No Change in Tax Rates: There is no change in Tax Rates, Surcharge, Education Cess, hence existing education cess of 3% and surcharge of 10% for annual income of Rs. 1 crore and more continue.

b. The basic exemption limit is increased by Rs. 50,000 for all taxpayers below 80 years of age as per the table specified below. The change in exemption limit means that irrespective of whether you are in 10%, 20% or 30% income tax slab, you save Rs. 5,150 in taxes. For those aged 80 or more, the change in the exemption limit is irrelevant, since they are anyway eligible for a limit of Rs. 5 lakh.


Person Old Exemption Limit Proposed Exemption Limit
Male/ Female(below 60 years) 2,00,000 2,50,000
Senior Citizen (60 years to
79 year)
2,50,000 3,00,000
Super Senior Citizen (80 years
and above)
5,00,000 5,00,000 (No Change)

2. Section 80 C : Increase in Investment Limit from Rs. 1 lakh to 1.5 lakh:

a. The maximum deduction under section 80 C, which covers investment options like provident fund, public provident fund (PPF), insurance policies and equity linked saving schemes, is to increase from Rs. 1 lakh to Rs. 1.5 lakh. This means it can result into extra saving as high as Rs. 16,995 depending upon your tax slab.

3. The maximum deduction for payment of Interest on Loan in respect of Self Occupied House Property is increased from Rs. 1.5 lakhs to Rs. 2 lakhs.

4. Unlisted Securities and Units of Mutual fund than equity oriented funds

a. Unlisted securities and mutual funds (other than equity oriented) shall qualify as long term capital asset if held for more than 36 months (increased from earlier period of 12 months).

b. Long term capital on sale of listed mutual funds (other than equity oriented funds) will be taxed at the rate of 20% with indexation. Earlier such gains were taxable at the rate of 10% without indexation or 20% with indexation, whichever is lower.

5. Exemption from tax on Long term capital gain on sale of residential property or any other asset is proposed on re-investment in only one residential house in India.


1. Income and Dividend Distribution Tax is to be levied on gross amount instead of amount paid net of taxes
[Sec. 115 O].

Tax on Foreign Dividend @ 15% [Section 115BBD]

The section continues to apply to foreign dividends received during the financial year 2014-15 and subsequent years

2. Disallowance of expenditure on non-deduction of appropriate taxes now extended to cover salary payments and directors fees

In case of Non deduction or Non payment of TDS, 30% of such payment is disallowed instead of existing 100% [Sec. 40(a)(1a)]

3. Expenditure incurred on Corporate Social Responsibility (CSR) is proposed as not an allowable business expenditure. However specific expenditure covered under section 30 to 36 of the Act will be allowed. Such specific expenses include repairs, depreciation or expenditure towards specific notified projects. Disallowing as a business expenditure could result into additional burden of tax for corporates.

4. a. Investment Allowance @ 15% [Sec. 32 AC]:
Benefit extended to manufacturing company that investsmore than Rs. 25 crorein any year in new plant and machinery. The Benefit is available upto 3 years i.e. for investment upto 31.03.2017.

b. Tax Holiday of 10 Years to Power sector(undertaking which begin generation, distribution and transmission of power by 31.03.17).

5. Advance Ruling and Transfer Pricing:

a. Earlier, an advance ruling could be availed by a resident only in respect of transactions with non-residents. Now resident taxpayers can seek clarity on taxability with regard to domestic transactions as well.

b. Keeping in line with international tax practice, effective from October 1, 2014, roll Back provisions are being proposed in advance pricing agreement (APA), wherein APA could also cover the four previous years immediately preceding the first year covered under the APA.

c. Determination of arm’s length price in transfer pricing

– Introduction of range pricing concept

– To allow use of multiple year data for comparability analysis instead of only single year data.

Courtesy: CA Chintan Patel
Email: chintan@nareshco.com Website: www.nareshco.com


Feb 252014


Given below are some highlights of the Interim Budget 2014-15.

Change in tax rates

Considering the demands of the economic situation, the minister of finance announced some changes in the indirect taxes.

A cut down in the excise duty from 12 percent to 10 percent on all goods covered under Schedule to the Central Excise Tariff Act (Chapter 84 & 85 of the act for the period up to 30.6.2014).

Automobile industry which is suffering negative growth will be allowed a decrease in the excise duty.

Indirect taxes on cars and mobile phones cut in order to recover growth.

Exemptions will be withdrawn from the CVD on similar imported machinery.

The customs duty structure on non-edible grade industrial oils and its fractions, fatty acids and fatty alcohols will rationalise at 7.5 percent.


The annual growth for the year is expected at 4.9percent, estimating the GDP expansion in the third and fourth quarters as 5.2 percent.

Current Account Deficit

Considering the last year’s fiscal deficit $88 billion , the current account deficit for 2013-14 estimated at $45 billion.

 The end of 2013-14 will see Forex reserves to be rising by $15 billion.


2012-13 saw a Food grain production of 255.36 million tonnes and the honourable minister praised the steady performance of the agriculture sector. The estimate for the current year is 263 million tonnes.  Agricultural GDP growth is estimated at 4.6 percent in the current year.


The global trade recovered its growth decline from 6.1 in 2011 to 2.7 percent in 2013 thus indicating an overall recovery in the context of global trade growth.

In spite of 2013-14 beginning on a low note, the merchandise exports were observed to be USD 326 billion bringing along a growth rate of 6.3percent.

However, the imports run a downhill which calls for a need of augmenting growth in both exports and imports.


Spending ascended up to 10 percent to Rs.224,000 crore in 2014/15 from Rs.203,672 crore in BE 2013-14 .

SC Sub-Plan and Tribal Sub-Plan, Gender Budget and Child Budget

The minister proposed to allocate Rs.48,638 crore to the scheduled caste sub plan and Rs.30,726 crore to the tribal sub plan.

Also, the child budget plan will be of Rs.81024 crore and the gender budget upto Rs.97,533 crore.


The railway budget being was presented a few days before. The railways will receive an increased budgetary support of Rs.29000 crore in 2014-15 as against the Rs26,000 crore in 2013-14.

For the purpose of capital infusion in public sector banks, the budget will aid the financial sector by providing 11,200 crore.


The plan expenditure is estimated at Rs.5.5 trillion for 2014-15 same as that of the fiscal year. Non-plan expenditure is estimated at Rs.12.08 trillion in 2014-15.


The budget for total spending on food, fertilisers and fuel is Rs.2.5 trillion in 2014-15.

1.15 trillion rupees for food subsidy, fertiliser subsidy at Rs.679.71 billion.

Petroleum subsidy estimated at Rs.634.27 billion as against the revised figure of Rs.854.8 billion in 2013-14.

Budget Estimates

Fiscal Deficit

The fiscal deficit of 2014-15 is projected at 4.1 percent of GDP while the revenue deficit is seen at 3.0 percent. Fiscal deficit is anticipated at 4.6% of GDP in 2013-14 below the targeted 4.8%.

Borrowing/debt servicing

Gross market borrowing for 2014/15 estimated at Rs. 5.97 trillion while the net market borrowing seen at Rs. 4.57 trillion.

In 2014-15 the government plans to buy back/ switch bonds worth Rs.500 billion.

Rs.100 billion estimated for the Ways and Means advances for year 2014-15.

Repayment of debt is estimated at Rs. 1.397 trillion.

Interest payments expected to see a rise in 2014-15 at Rs. 4.27 trillion. The current fiscal year’s was at Rs.3.8 trillion.


Finance Minister recommends that regarding the limited sources and claims on these, the most vital ones be chosen and given only to the rightly deserving ones.

India’s economy has secured a place as the eleventh largest economy in the world. And with the going progress India’s nominal GDP will reach to the third largest economy in the world said the minister. The budget was concluded by the note that India will occupy a more significant position in the world as an economy and have an impact on other economies in the near future. Hence a need to keep the economy stable is seen.

Mar 082013


The long-awaited Budget for the new financial year 2013-14 was announced by the Finance Minister P. Chidambaram. The budget comes up with some major and minor amendments in the financial plan, the common man needs to find out what’s in for him, the plus and the minus. Here are the highlights of the Budget 2013:

  • Budget expenditure for 2013-14- Plan expenditure fixed at Rs 555,322 crore; Non plan expenditure at Rs 11,09,975 crore.
  • Law has been modified to prevent tax avoidance that shall come into effect from the 1st of April,2016.For contributions to national children’s fund , 100% tax deduction is allowed
  • Mutual fund tax redemptions reduced to .001 percent
  • With a 5% increase in the total figure dedicated to defence has risen to Rs.203,672 crore.
  • Maintenance repair overhaul sector (MRO) shall be encouraged by  granting concessions to smoothen the business in the aviation segment
  • 18% excise duty increased on cigarettes
  • Customs duty on non agricultural products remain same
  • A considerable increase in import duty from 75% to 100% is noted on heavy  vehicles.
  • No change in basic customs duty rate of ten per cent and service tax rate of 12 per cent.
  • Import duty on rice bran oilcake withdrawn
  • Tax Administrative Reforms Commission to be set up to regularly review tax law applications.
  • Rajiv Gandhi Equity Scheme to be liberalised.
  • Need to encourage FDI in consonance with economic priorities
  • Tds is proposed on the sale of immovable properties. In spite of no capital gain on sale, 1% consideration to be deducted by government.
  • From the 1st June,2013 Wealth Tax Returns will be electronically filed.
  • Defective Return: To save the return from being counted in the defective or invalid return, the tax should be paid before filing the return.
  • Investment allowance deduction to be treated as income under profits and gains of business or profession. This condition arises when the asset on which deduction is allowed is transferred within 5yrs.
  • Taking a loan in order to acquire a residential property from the bank, allows the loan seeker a deduction over and above 1.50.000 adding up the total benefit to Rs.2,50,000.
  • Commodities Transaction Tax (CTT) this tax is to be  levied on sale of commodity derivatives and transactions traded in recognized associations at the rate of 0.01
  • Agricultural land’s meaning has been modified from its earlier definition. If the situation of the land is 2 kms/6kms/8kms from the local municipality and the population lies between 10,000-1,00,000, 1,00,000-10,00,000 and above 10,00,000 respectively, then the area shall be called urban area.
  • Security Transaction Tax Reduced from 10% to 25 %
  • Royalty/Fees for Technical Services Paid to Non-Residents increased from 10% to 25%
  • Immovable property when received for a consideration less than stamp duty value, the difference between stamp value and sale price ,in the hands of purchaser and buyer are taxable under the heads income from other sources and capital gains/business/ profession respectively.
  • Keyman insurance policy assigned to any person, no exemption is granted on maturity if transferred from the company to keyman.
  • For  land/building held as stock in trade,  the stamp duty value to be taken as consideration under the head profits and gains from  business/profession.


Fiscal deficit shall be seen at 4.8 point of GDP in 2013-14 as compared to 5.2 point of GDP in 2012-13.rationalizing expenditure seems to be the option to face the huge deficit. The financial plan aims at reducing the fiscal deficit to 3% and revenue deficit to 1.5% of GDP by 2016-17


Relief in Tax credit of Rs.2000 to be provided to every person with an annual income upto Rs.5 lakh, around 1.8 crore people will benefit from this .Personal income tax slabs have not been increased or decreased.. Those with an income of Rs.1 crore and above, 10% surcharge applicable.

For Domestic Companies Surcharge at the rate 5% to be continued if Taxable Income exceeds Rs. 1 crore but upto Rs. 10 crore.10% if Taxable Income exceeds Rs. 10 crore. Education Cess and Marginal Relief to be continued as before

For foreign companies , 2% surcharge in case of income ranging in between 1crore-10 crore, whereas ,for income above 10 crore  5% surcharge applicable.


  • Service tax remains untouched at the 12 % rate
  • Service tax on all air conditioned restaurants (those serving alcohol and those not serving, both)
  • No service tax to be charged on vocational courses offered by the government institutions
  • No service tax on agricultural testing procedures.
  • Vehicle parking to general public will be covered under the service tax
  • For service tax defaulters, One time voluntary compliance scheme is introduced. The Direct tax proposals are expected to yield Rs 13,300 crore  while  indirect tax proposal to give Rs 4,700 crore. Under the Voluntary Compliance Encouragement Scheme 2013, service providers can register themselves and declare the last 5yrs’ accountability and refrain from any sort of penalty if tax is paid on time.
  • Courses approved by State Council of Vocational Training to be included in the Approved Vocational Educational Course .
  • Charitable organizations’ services to be exempted from tax .(The limit of value of progression reduced from Rs.25 lacs to Rs.10 lacs)
  •  The abatement for construction to be reduced from 75% to 70% provided carpet area of residential unit is greater than 2000 sq.ft.


  • Rs. 1000 crore to be used for establishing Nirbhaya funds
  • In order to ensure dignity, safety and security of women various measures of safety shall be introduced and investments on plans and programmes seeking the above for the female population and promoting the progress of the girl child.Rs.97000 to be put towards women’s development.


  • Promotion and encouragement of waste to energy project in the cities.
  • Low interest rate funds will be made available in order to promote clean energy and make it easier for the people.
  • A shift from profit sharing to revenue sharing will be seen in oil and gas sector

The funds allocated for/under various schemes / sectors are stated as follows:

Allocated funds                                   Plan/ scheme/sector                      

  •  Rs.500 crore                                    Promoting crop diversification
  •  Rs.200 crore                                    Promoting nutrient-rich crops
  •  Rs.50 crore                                      Farmer-producer organisations
  •  Rs.50 crore                                      Textile ministry establishing apparel parks
  • Rs.96 crore                                       Handloom sector to benefit 150,000 weavers by

Concessional  six per cent interest on loans

  • Rs.41,000 crore                               Scheduled Caste plan
  • Rs.110 crore for                              Department of disabilities
  •  Rs.37,330 crore                              Health ministry
  • Rs.65,867 crore                               Human resource development ministry
  • Rs.13,250 crore                               midday meals scheme
  • Rs.17,700 crore                               Integrated Child Development Scheme
  • Rs.15,260 crore                               Drinking water and sanitation ministry
  • Rs.307 crore                                     National livestock mission to be launched
  • Rs.10,000 crore                               Initial expenditure on implementation
  • Rs.80,294 crore                               Rural development ministry allocation raised by 46 per cent
  • Rs.33,000 crore                               Rural jobs scheme
  • Rs.140 billion                                   capital infusion in state-run banks
  • Rs.800 crore                                     New and Renewable energy


  • Tax free infrastructure bonds to be issued worth rs.50000 crore.
  • Infrastructure debt funds will be proposed to be promoted
  • In the first six months of 2013, 3000 km of road projects to be granted. A regulator needs to be appointed for the same.
  • For investors (investing over Rs.100 crore) in infrastructure projects, over 15 percent and more of  incentive allowance permitted depreciation
  • Two  major ports coming up between west Bengal and Andhra Pradesh which will augment the 100 million tonnes handling capacity
  • To ensure the operations are being carried out at Dabhol gas handling terminal in Maharashtra.
  • New cities to emerge along Delhi – Mumbai corridor
  • Elementary work to start up on Bangalore Mumbai industrial corridor

FOREIGN TRADE: Duty on exports of precious and semi precious stones to be cut to 2 point .No duty to be imposed on import of ships, vessels.

With the rising cost of living, the new budget will facilitate bond to protect our investments against inflation.

Health and Education shall be seen as the priorities along with welfare of women and children. Healthcare/medical institutions/affiliated schools will see some government spending. 3 billion to be allocated for programs aimed at solving the health issues like malnutrition. Alongside, safe drinking water to be made available by setting up more and more purification plants in order to combat food inflation, the food supply will be augmented. Foodgrain production for 2013 has been estimated to reach 250 million tonnes. Rs.10,000 crore allocated for initial expenditure on implementation. Creating abundant opportunities and scope for the youth in terms of job prospects/self employment will be laid emphasis upon thus increasing employment and ensuring security to many.