UNION BUDGET – 2015 - 16
INVESTMENT & 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 %
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
Inflation on decline
Year
2012 – 13 2013 - 14 2014 - 15
Whole Sale Price
Index (WPI) %
Consumer Price
Index (CPI) %
7.5
6.0
3.8
9.1
9.5
7.0
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
Exports picking up
Year
2012 - 13 2013 - 14 2014 - 15
Export
Growth
- 1.8 %
4.1 %
UNION BUDGET – 2015 – 16 – BACKDROP
4.6 %
Indian Economy in “Sweet Spot”
Decline in Crude Oil Prices
Year
Average Crude
Oil Prices in US$
Brent Crude
2013
2014
108.64
99.02
Present
(as on 28-02-15)
62.58
Source : www.eia.gov.in
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
Decline in Fiscal Deficit
(as a % of GDP)
2012 - 13 2013 - 14 2014 - 15
4.8
4.5
4.1
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
Relatively stable Exchange Rate
US $ to INR
1 Year Before Modi Government
After Modi Government
54 - 68.50
58 - 63.50
Source : www.rbi.org.in
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
Tax Collections are getting better
(as a % of GDP)
2012 - 13 2013 - 14 2014 - 15
Direct tax revenue
5.5
5.6
5.8
Indirect tax
4.7
4.3
4.9
revenue
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
Subsidies on a decline
(as a % of GDP)
2012 - 13
2.5
2013 - 14
2.2
UNION BUDGET – 2015 – 16 – BACKDROP
2014 - 15
2.0
Indian Economy in “Sweet Spot”
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
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
Sensex on the rise
March 2013
March 2014
February 2015
18836
22386
29220
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
India in the BRICS Pack
UNION BUDGET – 2015 – 16 – BACKDROP
Indian Economy in “Sweet Spot”
First time in recent history Indian GDP growth
rate to match up with China
UNION BUDGET – 2015 – 16 – BACKDROP
Budget Speech…
UNION BUDGET – 2015 – 16
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%.
UNION BUDGET – 2015 – 16
Important announcements in the
Budget Speech
Goods & Services
Tax
to
be
operational from
01 – 04 - 2016
UNION BUDGET – 2015 – 16
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.
UNION BUDGET – 2015 – 16
Goods & Services Tax
It 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)
b)
c)
d)
e)
f)
g)
h)
Central Excise Duty
Duties of Excise (Medicinal & Toilet Preparation)
Additional Duties of Excise (Goods of Special Importance)
Additional Duties of Excise (Textiles and Textile Product)
Additional Duties of Customs (commonly known as CVD)
Special Additional Duty of Customs (SAD)
Service Tax
Cesses and surcharges
UNION BUDGET – 2015 – 16
Goods & Services Tax
State taxes that would be replaced by the State GST are :
a)
b)
c)
d)
e)
f)
g)
h)
State VAT
Central Sales Tax
Luxury Tax
Entry Tax (other than those in lieu of octroi)
Entertainment Tax (not levied by the local bodies)
Taxes on advertisement
Taxes on lotteries, betting and gambling
State cesses and surcharges insofar as they relate
to supply of goods or services
UNION BUDGET – 2015 – 16
Goods & Services Tax
Credit 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.
UNION BUDGET – 2015 – 16
Important announcements in the
Budget Speech
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.
UNION BUDGET – 2015 – 16
Important announcements in the
Budget Speech
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.
UNION BUDGET – 2015 – 16
Important announcements in the
Budget Speech
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.
UNION BUDGET – 2015 – 16
Important announcements in the
Budget Speech
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.
UNION BUDGET – 2015 – 16
Important announcements in the
Budget Speech
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.
UNION BUDGET – 2015 – 16
Important announcements in the
Budget Speech
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.
UNION BUDGET – 2015 – 16
Income Tax
UNION BUDGET – 2015 – 16
Income Tax
UNION BUDGET – 2015 – 16
Income Tax
Additional 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.
UNION BUDGET – 2015 – 16
Income Tax
Deduction U/s 80JJAA 30% of additional wages
for 3 years.
Deduction extended to noncorporate 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.
UNION BUDGET – 2015 – 16
Income Tax
Deduction 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.
Deduction U/s 80D.
1.
2.
3.
4.
Self & Family
Parents
HUF
If anyone is a senior citizen
(above 60 years) in 1,2,3 above than
Medical Expenses of very senior
citizens shall also be considered.
UNION BUDGET – 2015 – 16
Present Limit Proposed Limit
15,000/=
25,000/=
15,000/=
25,000/=
15,000/=
25,000/=
20,000/=
30,000/=
Income Tax
Form 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.
UNION BUDGET – 2015 – 16
Income Tax
Sec. 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.
UNION BUDGET – 2015 – 16
Impact of the Budget
Economic 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.
UNION BUDGET – 2015 – 16
Impact of the Budget
We 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.
UNION BUDGET – 2015 – 16
Message
UNION BUDGET – 2015 – 16
Thank you...
Questions?
UNION BUDGET – 2015 – 16