Forwards Markets Commission to be Merged with Sebi




Forwards Markets Commission to be Merged with Sebi

The Union Finance Minister Shri Arun Jaitley has proposed to merge the Forwards Markets Commission with SEBI to strengthen regulation of commodity forward markets and reduce wild speculation. Enabling legislation, amending the Government Securities Act and the RBI Act is proposed in the Finance Bill, 2015.


It has also been proposed to amend through the Finance Bill, Section 6 of FEMA to provide that control on capital flows as equity will be exercised by the Government, in consultation with the RBI.

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8 Centrally Sponsored Schemes Delinked from Support of the Centre

24 Schemes to be run with the Changed Sharing Pattern while 31 Schemes will Get Full Support of the Centre

The plan outlay of 2015-16 reflects the compositional shift in the allocations for various Programmes and Schemes in view of high devolution; 42% of Union Taxes, to States as per the recommendation of 14th Finance Commission. Making his Budget Speech while presenting the General Budget 2015-16, the Finance Minister, Shri Arun Jaitley said that consequent to this substantially higher devolution, many schemes on the State subjects are to be delinked from Central support.  However, keeping in mind that some of these schemes represent national priorities especially those targeted at poverty alleviation, Centre has decided that it will continue to contribute to such schemes, the Minister added.  Besides, the schemes mandated by legal obligations and those backed by Cess collection have been fully provided for.

As per the Budget 2015-16, centre has decided to support fully which are targeted to the benefits of socially disadvantaged group.  In case of some Centrally Sponsored Schemes, the Centre: State funding pattern will undergo a change with States to contribute higher share.  Details of changes in sharing pattern will have to be worked out by administrative Ministry/Department.  The details of Plan outlays in 2015-16 are to be seen against this backdrop.

In the General Budget 2015-16, there are 31 Schemes to be fully sponsored by the Union Government, 8 Schemes have been delinked from support of the Centre and 24 Schemes will now be run with the changed sharing pattern.  

To enhance public spending in the economy, Government has significantly enhanced the capital expenditure despite fiscal pressure.  In comparison to capital spending of Rs. 192378 crore in RE 2014-15, the capital spending will be Rs. 241431 crore in 2015-16.  This will be a growth of 25.5 per cent.

            The list of Schemes (i) to be fully supported by Union Government (ii) to be delinked from support of the Centre (iii)  to be run with the Changed Sharing Pattern is given below:-


(A) Schemes to be fully supported by Union Government:
1.      Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA)
2.      Multi-Sectoral Development Programme for Minorities (MSDP)
3.      Pre-Matric scholarship for children of those engaged in unclean occupation
4.      Scholarship Schemes (Post and Pre-Matric) for SC, ST and OBCs
5.      Support for machinery for Implementation of Protection of Civil Rights Act, 1955 and Prevention of Atrocities Act, 1989
6.      National Programme for Persons with Disabilities
7.      Scheme for providing Education to Minorities
8.      Umbrella Scheme for education of ST children
9.      Indira Gandhi Matritva Sahyog Yojana (IGMSY)
10.  Integrated Child Protection Scheme (ICPS)
11.  Rajiv Gandhi Scheme for Empowerment of Adolescent Girls (RGSEAG)-SABLA
12.  National Nutrition Mission
13.  Scheme for Protection and Development of Women
14.  Assistance for Schemes under Proviso (i) to article 275 (1) of the Constitution
15.  Special Central Assistance to Tribal Sub-plan
16.  Sarva Shiksha Abhiyaan (Financed from Education Cess)
17.  Mid Day Meal
18.  Schemes of North Eastern Council
19.  Special package for Bodoland Territorial Council
20.  National Social Assistance Programme (NSAP) including Annapurna
21.  Grants from Central Pool of Resources for North Eastern Region and Sikkim
22.  Social Security for Unorganized Workers Scheme
23.  Support to Educational Development including Teacher Training and Adult Education
24.  Border Area Development Programme
25.  Member of Parliament Local Area Development Scheme (MPLADS)
26.  Cess backed allocation for Pradhan Mantri Gram Sadhak Yojana (PMGSY)
27.  Roads and Bridges financed from Central Road Fund
28.  Project Tiger
29.  Project Elephant
30.  Additional Central Assistance for Externally Aided Projects (loan portion)
31.  Additional Central Assistance for Externally Aided Projects (Grant portion)
(B)  Schemes to be run with the Changed Sharing Pattern:
1.      Cattle Development
2.      Mission for Integrated Development of Horticulture
3.      Rashtriya Krishi Vikas Yojana
4.      National Livestock Mission
5.      National Mission on Sustainable Agriculture
6.      Dairy Vikas Abhiyaan
7.      Veterinary Services and Animal Health
8.      National Rural Drinking Water Programme
9.      Swaccha Bharat Abhiyaan (Rural and Urban)
10.  National Afforestation Programme
11.  National Plan for Conservation of Aquatic Eco-system (NPCA)
12.  National AIDS and STD Control programme
13.  National health Mission
14.  National Urban Livelihoods Mission (NULM)
15.  Rashtriya Madhyamik Shiksha Abhiyaan (RMSA)
16.  Strategic Assistance for State Higher Education – Rashtriya Uchcha Shiksha Abhiyan (RUSA)
17.  For Development of Infrastructure Facilities for Judiciary
18.  National Land Records Modernisation Programme
19.  National Rural Livelihood Mission (NRLM)
20.  Rural Housing-Housing for All
21.  Integrated Child Development Service
22.  Rajiv Gandhi Khel Abhiyan (RGKA) (erstwhile Panchayat Yuva Krida aur Khel Abhiyan (PYKKA)
23.  PMKSY (including Watershed programme and micro irrigation)
24.  Impact Assessment Studies of AIBFMP



(C) Schemes delinked from support of the Centre:
1.      National e-Governance Plan
2.      Backward Regions Grant Funds
3.      Modernization of Police Forces
4.      Rajiv Gandhi Panchayat Sashaktikaran Abhiyaan (RGPSA)
5.      Scheme for Central Assistance to the States for developing export infrastructure
6.      Scheme for setting up of 6000 Model Schools
7.      National Mission on Food processing
8.      Tourist Infrastructure


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No Change in the Rate of Personal Income-Tax and The Rate of Tax for Companies on Income in Financial Year 2015-16

Surcharge @12% Levied on Individuals, HUFs, AOPs, BOIs, Artificial Juridical Persons, Firms, Cooperative Societies and Local Authorities Having Income Exceeding Rs 1 Crore

The Union Finance Minister Shri Arun Jaitley in his Budget Speech in Lok Sabha today proposed no change in the rate of personal Income-tax. He announced the tax proposals with no change in the rate of tax for companies in respect of the income earned in the financial year 2015-16, assessable in the assessment year 2016-17.

However, Finance Minister Shri Arun Jaitley proposed to levy a surcharge at the rate of 12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding Rs 1 crore. Surcharge in the case of domestic companies having income exceeding Rs 1 crore and upto Rs 10 crore is proposed to be levied @ 7% and surcharge @ 12% is proposed to be levied on domestic companies having income exceeding Rs 10 crore.

Shri Jaitley further proposed that in the case of foreign companies the surcharge will continue to be levied @ 2% if the income exceeds Rs 1 crore and is upto Rs 10 crore, and @ 5% if the income exceeds Rs 10 crore.

It is also proposed to levy a surcharge @ 12% as against current rate of 10% on additional income-tax payable by companies on distribution of dividends and buyback of shares, or by mutual funds and securitization trusts on distribution of income.

The education cess on income-tax @ 2% for fulfillment of the commitment of the Government to provide and finance universalized quality based education and 1% of additional surcharge called ‘Secondary and Higher Education Cess’ on tax and surcharge is proposed to be continued for the financial year 2015-16 for all taxpayers.

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A Trade Receivables Discounting System (TReDS) an Electronic Plateform for Financing of Trade Receivables of MSMES

Comprehensive Bankruptcy Code for Ease of Doing Business

The Finance Minister, Shri Arun Jaitely presenting the Union Budget 2015-16, here today said that a significant part of the working capital requirement of a MSME arises due to long receivables realization cycles and we are in the process of establishing an electronic Trade Receivables Discounting System (TReDS) financing of trade receivables of MSMEs, from corporate and other buyers, through multiple financiers. This should improve the liquidity in the MSME sector significantly.

Shri Jaitley said that Bankruptcy law reform that brings about legal certainty and speed, has been identified as a key priority for improving the ease of doing business. SICA (Sick Industrial Companies Act) and BIFR (Bureau of Industrial and Financial Reconstruction) have failed in achieving these objectives. We will bring a comprehensive Bankruptcy Code in fiscal 2015-16, that will meet global standards and provide necessary judicial capacity.

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Monetising Gold

The Union Finance Minister Shri Arun Jaitley has announced several steps for monetizing gold. Presenting the General Budget 2015-16 in the Lok Sabha here today, the Union Finance Minister Shri Arun Jaitley stated that stocks of gold in India are estimated to be over 20,000 tonne but mostly this gold is neither traded, nor monetized. Shri Jaitley proposed to introduce Gold Monetisation Scheme, which will replace both the present Gold Deposit and Gold metal Loan Schemes. The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal account. Banks/ other dealers would also be able to monetize this gold.

The Finance Minister also announced the development of an alternate financial asset, a Sovereign Gold Bond, as an alternative to purchasing metal gold. The Bonds will carry a fixed rate of interest, and also be redeemable in case in terms of the face value of the gold, at the time of redemption by the holder of the Bond.

Shri Arun Jaitley also announced that the Government shall commence work on developing an Indian Gold Coin, which will carry the Ashok Chakra on its face. Such an Indian Gold Coin would help reduce the demand for coins minted outside Indian and also help to recycle the gold available in the country.

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Postal Network Spread Across the Country to be Used for Increasing Access to Formal Financial System

The Finance Minister, Shri Arun Jaitely presenting the Union Budget 2015-16, here today, said that the government is committed to increasing access of the people to the formal financial system. In this context, Government proposes to utilize the vast Postal network with nearly 1,54,000 points of presence spread across the villages of the country . The Minister hoped that the Postal Department will make its proposed Payments Bank venture successful so that it contributes further to the Pradhan Mantri Jan Dhan Yojana.

Shri Jaitley said that to bring parity in regulation of Non-Banking Financial Companies (NBFCs) with other financial institutions in matters relating to recovery, it is proposed that NBFCs registered with RBI and having asset size of Rs. 500 crore and above will b considered for notifications as ‘Financial Institution’ In terms of the SARFAESI Act, 2002.

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Universal Social Security System for all Specially the Poor and the Under-Privileged:

Soon-To-Be-Launched Pradhan Mantri Suraksha Bima Yojana

The Atal Pension Yojana Launched

  The Prahan Mantri Jeevan Jyoti Bima Yojana Announced

Scheme to Subsidize the Premiums of Vulnerable Groups Such as Old Age Pensioners, BPL Card-Holders, Small and Marginal Farmers and Others

Integrated Education and Livelihood Scheme ‘Nai Manzil’ will be Launched for Minorities




            The Union Finance Minister, Shri Arun Jaitely presenting the Union Budget 2015-16, here today said that a large proportion of India’s population is without insurance of any kind – health, accidental or life worryingly, as our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, the Finance Minister proposed to work towards creating a universal social security system for all Indians, specially the poor and the under-privileged.

            Shri Jaitley said that soon Pradhan Mantri Suraksha Bima Yojana will be launched to cover accidental death risk of Rs. 2 lakh for a premium of just Rs. 12 per year. Similarly, we will also launch the Atal Pension Yojana, which will provide a defined pension, depending on the contribution, and its period. To encourage people to join this scheme, the Government will contribute 50% of the beneficiaries’ premium limited to Rs. 1,000 each year, for five years, in the new accounts opened before 31st December, 2015.

            The Finance Minister further said that the third Social Security Scheme that is to announce is the Pradhan Mantri Jeevan Jyoti Bima Yojana which covers both natural and accidental death risk of Rs. 2 lakhs. The premium will be Rs. 330 per year, or less than one rupee per day, for the age group 18-50.

            Shri Jaitley said that there are unclaimed deposits of about Rs. 3,000 crore in the PPF, and approximately Rs. 6,000 crore in the EPF corpus. The Finance Minister proposed the creation of a Senior Citizen Welfare Fund, in the Finance Bill, for appropriation of these amounts to a corpus which will be used to subsidize the premiums of vulnerable groups such as old age pensioners, BPL card-holders, small and marginal farmers and others. Shri Jaitley informed that a detailed scheme would be issued in March.

            The Finance Minister further said that special regard needs to be paid to the population of senior citizens in the country which is now approximately 10.5 crore, out of which over one crore are above the age of 80 years. 70% live in rural areas and a large number are in the BPL category. A sizable percentage of them also suffer from age related disabilities. The Finance Minister proposed a new scheme for providing Physical Aids and Assisted Living Devices for senior citizens, living below the poverty line.

            Shri Jaitley said that in sum, these social security schemes reflect our commitment to utilize the Jan Dhan platform, to ensure that no Indian citizen will have to worry about illness, accidents, or penury in old age. Being sensitive to the needs of the poor, under-privileged and the disadvantaged, my Government also remains committed to the ongoing welfare schemes for the SCs, STs and Women. Despite serious constraints on Union finances, allocations made this year are as follows:
                        SC                   Rs. 30,851 crore
                        ST                    Rs. 19,980 crore
                        Women            Rs. 79,258 crore

            The Minister announced an integrated education and livelihood scheme called ‘Nai Manzil’ will be launched this year to enable Minority Youth who do not have a formal school-leaving certificate to obtain one and find better employment. Further, to showcase civilization and culture of the Parsis, the Government will support, in 2015-16, an exhibition, ‘The Everlasting Flame’.
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Employees Under the Employees Provident Fund(EPF) to be Provided two Options

The Union Finance Minister Shri Arun Jaitley has announced that with respect to Employees Provident Fund (EPF), the employee needs to be provided two options. Firstly, the employee may opt for EPF or the New Pension Scheme (NPS). Secondly, for employees below a certain threshold of monthly income, contribution to EPF should be optional, without affecting or reducing the employer’s contribution. He said, with respect to ESI, the employee should have the option of choosing either ESI or a Health Insurance product, recognized by the Insurance Regulatory Development Authority (IRDA).

The Finance Minister announced that he intends to bring amending legislation in this regard, after stakeholders’ consultation.

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Shri Jaitley Announces Measures to Improve the Ease of Doing Business with
Simplification of Tax Procedures in Finance Bill 2015

The Union Finance Minister Shri Arun Jaitley in his Budget Speech in Lok Sabha today announced measures to improve the ease of doing business so as to achieve ‘Minimum Government and Maximum Governance’. He sought to bring about simplification of tax procedures in the Financial Bill 2015. Monetary limits for a case to be heard by a single member bench of ITAT is proposed to be increased from Rs 5 lakh to Rs 15 lakh. The proposed amendments in the Income-tax Act provide that:

·         Penalty provision in indirect taxes are being rationalized to encourage compliance and early dispute resolution.

·         Central excise/ Service tax assesses to be allowed to use digitally signed invoices and maintain record electronically.

·         Wealth-tax replaced with additional surcharge of 2 per cent on super rich with a taxable income of over Rs 1 crore annually.

·         Provision of indirect transfers in the Income-tax Act suitably cleaned up.

·         Applicability of indirect transfer provisions to dividends paid by foreign companies to their shareholders to be addressed through a clarificatory circular.

·         Domestic transfer pricing threshold limit increased from Rs 5 crore to Rs 20 crore.

·         MAT rationalized for FIIs and members of an AOP.

·         Tax Administration Reform Commission (TARC) recommendations to be appropriately implemented during the course of the year.

·         Education cess and the Secondary and Higher education cess to be subsumed in Central Excise Duty.

·         Specific rates of central excise duty in case of certain other commodities revised.

·         Excise levy on cigarettes and the compounded levy scheme applicable to pan masala, gutkha and other tobacco products also changed.

·         Excise duty on footwear with leather uppers and having retail price of more than Rs 1000 per pair reduced to 6 %.

·         Online central excise and service tax registration to be done in two working days.

·         Time limit for taking CENVAT credit on inputs and input services increased from 6 months to 1 year.

·         Service-tax plus education cesses increased from 12.36% to 14% to facilitate transition to GST.

·         Donation made to National Fund for Control to Drug Abuse (NFCDA) to be eligible for 100% deduction u/s 80G of Income-tax Act.

·         Seized cash can be adjusted towards assesses tax liability.



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Focus to Improve Quality and Effectiveness of Activities Under MGNREGA
Need to Create National Agriculture Market for Farmers

The Finance Minister, Shri Arun Jaitely presenting the Union Budget 2015-16, here today, said that government is committed to supporting employment through MGNREGA and ensure that no one who is poor is left without employment. Shri Jaitley said that the focus is on improving the quality and effectiveness of activities under MGNREGA. Shri Jaitley proposed an initial allocation of Rs. 34,699 crore for the programme in the Budget.

Shri Jaitley said that “while the farmer is no longer in the clutches of the local trader, his produce still does not command the best national price. To increase the incomes of farmers, it is imperative that we create a National agricultural market, which will have the incidental benefit of moderating price rises”. The Minister intends this year to work with the States, in NITI, for the creation of a Unified National Agriculture Market.

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Benefits to Middle Class Tax Payers in the Budget 2015-16

Payments to the Beneficiaries Including Interest Payment on Deposit in Sukanya Samriddhi Scheme to be Fully Exempt

The Union Minister of Finance Shri Arun Jaitley in his Budget Speech in Lok Sabha today proposed rationalization of various tax exemptions and incentives to reduce tax disputes and improve tax administration. He said, with a view to encourage savings and to promote health care among individual tax payers, it is proposed to increase the limit of reduction of health insurance premium from Rs 15,000 to Rs 25,000 and for senior citizen this limit is increase from Rs 20,000 to Rs 30,000.

For senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure.  Deduction limit of Rs 60,000 on expenditure on account of specified diseases is enhanced to Rs 80,000 in the case of senior citizens.

Additional deduction of Rs 25,000 is allowed for differently-abled persons, increasing the limit from Rs 50,000 to Rs 75,000. It is also proposed to increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.

            The Finance Minister Shri Jaitley also proposed to provide that investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C of the income-tax and any payment from the scheme shall not be liable to tax.

Limit on deduction on account of contribution to a pension fund and the new pension scheme is proposed to be increased from Rs 1 lakh to Rs 1.5 lakh.

            Additional deduction of Rs 50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD increasing from Rs 1 lakh to Rs 1.5 lakh.
Details of tax deductions proposed are as follows:

·    
Deduction u/s 80C Rs 1,50,000
·        
Deduction u/s 80CCD Rs 50,000
·        
Deduction on account of interest on house property loan (Self occupied property) Rs 2,00,000
·        
Deduction u/s 80D on health insurance premium Rs 25,000
·        
Exemption of transport allowance Rs 19,200

Total Rs 4,44,200



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‘Act East’ Policy of the Government

The Union Finance Minister Shri Arun Jaitley today announced setting-up of manufacturing hubs in CMLV countries, namely, Combodia, Myanmar, Laos and Vietnam. Presenting the General Budget 2015-16 in the Lok Sabha here today, the Finance Minister stated that the ‘Act East’ policy of the Government endeavours to cultivate extensive economic and strategic relations in South-East Asia. In order to catalyse investments from the Indian private sector in this region, a project development company will set-up the manufacturing hubs in CMLV countries through separate Special Purpose Vehicles (SPVs).

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Micro Units Development Refinance Agency (MUDRA) Bank Set up for Small Enterprises in Lending Priority was Given to SC/ST Enterprises

The Union Finance Minister, Shri Arun Jaitely presenting the Union Budget 2015-16, here today, said that our government firmly believes that development has to generate inclusive growth. While large corporate and business entities have role to play, this has to be complemented by informal sector enterprises which generate maximum employment the Minister added. There are some 5.77 crore small business units, mostly individual proprietorship, which run small manufacturing, trading or service businesses. 62% of these are owned by SC/ST/OBC.

Shri Jaitley further said that these bottom-of-the-pyramid, hard-working entrepreneurs find it difficult, if not impossible, to access formal systems of credit. Shri Jaitley therefore, proposed to create a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore, and credit guarantee corpus of Rs. 3,000 crore. MUDRA Bank will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana. In lending, priority will be given to SC/ST enterprises. These measures will greatly increase the confidence of young, educated or skilled workers who would now be able to aspire to become first generation entrepreneurs; existing small businesses, too, will be able to expand their activities. The Finance Minister further said that just as we are banking the un-banked, we are also funding the un-funded.

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Distinction Between Different types of Foreign Investments Done Away to Simplify the Procedure for Indian Companies to Attract Foreign Investment

The Union Finance Minister Shri Arun Jaitley has proposed to do away with the distinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments, and replace them with composite caps. Presenting the General Budget 2015-16 in the Lok Sabha here today, the Union Finance Minister Shri Arun Jaitley stated that this was being done to further simplify the procedures for Indian companies to attract foreign investments. The sectors which are already on a 100 percent automatic route would not be affected.

The Finance Minister also proposed to allow foreign investments in Alternate Investment Funds keeping in view the need to increase investments from all sources.

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Jaitley’s Budget to Create Jobs through Revival of Growth and Investment with Promotion of Domestic Manufacturing and “Make In India”

The Finance Minister Shri Arun Jaitley presenting the Budget in Lok Sabha today proposed to defer the applicability of the General Anti Avoidance Rule (GAAR) by two years. Investments made up to 31.03.2017 shall not be subjected to GAAR.

Finance Minister Shri Jaitley proposed pass-through status to all sub-categories of Category I as well as Category II of Alternative Investment Funds (AIF) governed by regulations of Securities Exchange Board of India (SEBI) to streamline the taxation regime of AIFs.

Shri Jaitley proposed to modify the Permanent Establishment norms to facilitate relocation of fund managers of off-shore funds in India.

An additional investment allowance of 15% and additional depreciation of 15% to new manufacturing units set up in notified areas of Andhra Pradesh and Telangana from 01.04.2015 to 31.03.2020 is proposed by the Finance Minister in his Budget Speech.

With respect to the Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (INViTs), the Finance Minister proposed that the treatment granted to the sponsor on offloading of units at the time of listing will be the same as that granted if the shareholding of the Special Purpose Vehicle (SPV) had been offloaded at the stage of direct listing. Further, the Finance Minister said that rental income from real estate assets directly held by REITs are proposed to be allowed to pass through and taxed in the hands of the unit holders of the REIT.

Shri Arun Jaitley proposed to amend Section 194LD of the Income Tax Act to extend the period of applicability of reduced rate of tax at 5% for income of foreign investors including FIIs and QFIs from corporate bonds and government securities. The period of applicability is proposed to be extended from 31.05.2015 to 30.06.2017.

Seeking to address the problems faced by small companies and to facilitate the inflow of technology, the Finance Minister proposed to amend Section 115 of the Income Tax Act thereby reducing the rate of tax on royalty and fees for technical services from 25% to 10%.

To facilitate the generation of employment Shri Jaitley proposed that the tax benefit under section 80JJAA of the Income Tax Act will be available to a ‘person’ deriving profits from manufacture of goods in a factory and paying wages to new regular workmen. The amendment seeks to reduce the eligibility threshold from minimum 100 workmen to 50 workmen.

For new plant and machinery installed by a manufacturing unit or a unit engaged in generation and distribution of power an additional depreciation of 20 % is proposed by the Finance Minister. However, only 10 % of additional depreciation is proposed to be allowed if the asset is installed after 30th September of the previous year with the remaining 10 % to be allowed in the subsequent previous year.


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Paramparagat Krishi Vikas Yojna to be Fully Supported

Pradhanmantri Gram Sinchai Yojana to Provide ‘Per Drop More Crop’

The Finance Minister, Shri Arun Jaitely presenting the Union Budget 2015-16, here today, said that “Our commitment to farmers runs deep. We have already taken major steps to address the two major factors critical to agricultural production: soil and water”. In order to improve soil health, Union Minister propose to support Agriculture Ministry’s organic farming scheme – “Paramparagat Krishi Vikas Yojana”.

Shri Jaitely said the Pradhanmantri Gram Sinchai Yojana is aimed at irrigating the field of every farmer and improving water use efficiently to provide ‘Per Drop More Crop’.The Budget provides for alllocation of Rs. 5,300 crore to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana.The Minister urged the States to chip in substantially in this vital sector.

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Tax Measures Announced to Promote Swachh Bharat Initiatives and Public Health.

The Central Government will impose a Swachh Bharat Cess on all or certain taxable services at a rate of 2% from a date to be notified. The Finance Minister Shri Arun Jaitley announced in his Budget Speech that the proceeds from this Cess would be utilized for Swachh Bharat initiatives. In a related development, the Scheduled rate of Clean Energy Cess levied on coal lignite and peat is being increased form Rs. 100 per tonne to Rs. 300 per tonne. The effective rate of Clean Energy Cess is being increased from Rs. 100 per tonne to Rs. 200 per tonne. Similarly, Excise duty on sacks and bags of polymers of ethylene other than for industrial use is being increased from 12% to 15%.

Concessional customs and excise duty rates on specified parts of Electrically Operated Vehicles and Hybrid Vehicles, presently available up to 31.03.2015, is being extended up to 31.03.2016.

To promote public health, Excise duty on cigarettes is being increased by 25% for cigarettes of length not exceeding 65 mm and by 15% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos.

Maximum speed of packing machine is being specified as a factor relevant to production for determining excise duty payable under the Compounded Levy Scheme presently applicable to pan masala, gutkha and chewing tobacco.

Excise duty on chassis for ambulances is being reduced from 24% to 12.5%.

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Finance Minister Shri Arun Jaitley Outlines Measures to Curb Black Money in Budget 2015-16

The Finance Minister, Shri Arun Jaitley signaled the government’s intent to curb generation of black money in real estate in the Budget 2015-16. Presenting the Budget in the Lok Sabha today he proposed amendments in the Income Tax Act prohibiting acceptance or repayment of advance in cash of Rs. 20,000 or more for any transaction in immovable property. Penalties of equal amount will be imposed in case of contraventions.

In order to curb trade based money laundering, making false declarations/ documents in the transaction of any business relating to Customs (section 132, Customs Act) will be brought under the Prevention of Money Laundering Act as a “predicate offence”.

A Bill for a comprehensive new law to deal with black money parked abroad is likely to be introduced in the current session. Key features of the new law on black money are –

·         Evasion of tax in relation to foreign assets to have a punishment of rigorous imprisonment upto 10 years, be non compoundable, have a penalty of 300 % and the offender will not be permitted to approach the Settlement Commission.
·         Non filing of return/filing of return with inadequate disclosures to have a punishment of rigorous imprisonment upto 7 years.
·         Undisclosed income from any foreign assets to be taxable at the maximum marginal rate.
·         Mandatory filing of return in respect of foreign asset.
·         Entities, banks, financial institutions including individuals all liable for prosecution and penalty.
·         Concealment of income/evasion of income in relation to a foreign asset to be made a ‘predicate’ offence under PML Act, 2002
·         PML Act, 2002 and FEMA to be amended to enable administration of new Act on black money.

Also, the Government proposes Benami Transactions (Prohibition) Bill to curb domestic black money to be introduced in the current session of Parliament.

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Effective and Hassle-Free Agriculture Credit with a Special Focus on Small and Marginal Farmers

Target of Rs. 8.5 Lakh Crore of Agricultural Credit

The Finance Minister, Shri Arun Jaitley presenting the Union Budget 2015-16 here today, supported the agriculture sector with the help of effective and hassle-free agriculture credit, with a special focus on small and marginal farmers, Shri Jaitley proposed the Budget allocation of Rs. 25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD; Rs. 15,000 crore for Long Term Rural Credit Fund; Rs. 45,000 crore for Short Term Cooperative Rural Credit Refinance Fund; and Rs. 15,000 crore for Short Term RRB Refinance Fund.

Shri Jaitley said that “Farm credit underpins the efforts of our hard-working farmers, therefore an ambitious target of Rs. 8.5 lakh crore of credit during the year 2015-16 is set up, which the Minister was sure that the banks would surpass.

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Job Creation Through Revival of Growth and Investment and Promotion of Domestic Manufacturing and ‘Make in India’.

To promote domestic manufacturing and ‘Make in India’ for creation of more jobs, the Union Finance Minister Shri Arun Jaitley announced a series of cuts in Customs and Excise duties in the Union Budget 2015-16 presented in Parliament.

Customs duties on certain inputs like Metal parts, insulated wires and cables, Refrigerators compressor parts, compounds used in catalytic converters, Sulphuric Acid for use in manufacture of fertilizers and compounds of Video Cameras have been reduced.

Similarly Basic Customs Duty is being reduced on certain raw materials used in lathe machines from 7.5%, to 2.5%, medical video endoscopes from 5% to 2.5 %, telecommunication grade optical fiber cables from7.5% to Nil and LCD/LED TV panels from 10% to Nil.CVD and SAD are being fully exempted on specified raw materials for use in the manufacture of pacemakers.

SAD is reduced in Metal scrap of iron & steel, copper, brass and aluminum from 4% to 2% to address problem of CENVAT credit accumulation. For inputs for use in the manufacture of LED driver and MCPCB for LED lights, fixture and LED lamps SAD is reduced from 4% to Nil.

Basic Customs Duty is increased for metallurgical coke. Tariff rate is increased on iron & steel and articles of iron or steel. Tariff rate on Commercial Vehicles is increased from 10% to 40% and effective rate from 10% to 20%.

Excise duty is restructured on certain goods such as Wafers for use in the manufacture of integrated circuit (IC) modules for smart cards from 12% to 6%, inputs for use in the manufacture of LED lamps from 12% to 6%, specified raw materials for use in the manufacture of pacemakers to Nil , Solar water heater and system from 12.5% to Nil and Tablet computers from 12% to 2 %.

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Investment In Infrastructure To Go Up By Rs.70,000 Crore In Year 2015-16 Over Year 2014-15

The Union Finance Minister Shri Arun Jaitley has proposed an increase in investment in infrastructure by Rs. 70,000 crore in the year 2015-16 over the year 2014-15 from the Centre’s funds and resources of CPSEs. Presenting the General Budget 2015-16 in the Lok Sabha here today, the Finance Minister stated that the present state of infrastructure does not match the growth ambitions. Hence he has increased outlay on both the roads and the gross budgetary support to the Railways by Rs. 14,031 crore and Rs. 10,050 crores. The CAPEX of the public sector units is expected to be Rs.3,17,889 crores, an increase of approx. Rs. 80,844 crores over RE 2014-15.

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Black Money Bill in the Current Session

The Union Finance Minister Shri Arun Jaitley has said that a Bill to enact a new law to deal with black money is to be introduced in the current session of the Parliament. In his Budget Speech in the Lok Sabha here today, giving details of proposed key features of the law, the Finance Minister said this is the first and foremost pillar of his tax proposals. Shri Jaitley said there will be a provision for rigorous imprisonment upto 10 years for concealment of income and assets and evasion of tax in relation to foreign assets. Such offence will be made non-compoundable. A penalty for such concealment of income and assets at a rate of 300% of tax is also proposed. Non-filing of return/filing of return with inadequate disclosures is to attract a punishment of rigorous imprisonment upto 7 years. Entities, banks, financial institutions including individuals are liable for prosecution and penalty. Any date of opening of foreign account would be mandatorily required to be specified by the assessee in the return of income. The Foreign Exchange Management Act, 1999 (FEMA) and prevention of Money-laundering Act, 2002 (PMLA) are also to be amended.

The Minister asserted that tracking down and bringing back the wealth which legitimately belongs to the country is his government’s abiding commitment to the country. He said several measures have been initiated in the last 9 month to effectively deal with the problem of black money.

Shri Jaitley said all this is aimed at job creation through revival of growth and investment in domestic manufacturing and ‘Make in India’, to benefit the middle class taxpayers and to improve the ease of doing business in a climate of minimum government and maximum governance.

The Finance Minister also said that a more comprehensive Benami Transactions (Prohibition) Bill will also be introduced in the current session of the parliament to achieve the objective of curbing black money. Elucidating details he said quoting of PAN is being made mandatory for any purchase or sale exceeding the value of Rs 1 lakh. There will be prohibition on acceptance or payment of an advance of Rs 20,000 or more in cash for purchase of any immovable property.

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Corporate Tax to be Reduced and GST to be Implemented;

Gaar Deferred by Two Years

The Finance Minister Shri Arun Jaitley said that to give a fillip to growth, investment and promotion of domestic manufacturing and ‘Make in India’, aiming at job creation, a series of measures are included in the budget. In his Budget Speech in the Lok Sabha here today, Shri Jaitley said Tax ‘pass through’ is proposed to be allowed to both Category-I and Category-II Alternative Investment funds, so that tax is levied on investors in these funds and not on the funds per se.

The Finance Minister Shri Jaitley said the measure will step-up the ability of these funds to mobilize higher resources and make higher investments in small and medium enterprises, infrastructure and social projects and provide the much required private equity to new ventures and start-ups. He also said the Permanent Establishment (PE) norms are to be modified to encourage offshore fund managers to relocate to India. The modification will be to the effect that mere presence of a fund manager in India would not constitute PE of the offshore funds, as this is resulting in adverse tax consequences currently.

The Finance Minister also announced deferment of the General Anti Avoidance Rule (GAAR) by two years to accelerate the momentum of investment sentiment in the country, which he said, has turned positive now. Further, to facilitate technology inflow to small businesses at low costs, the rate of income tax on royalty and fees for technical services is to be reduced from 25% to 10%. Another step for boosting employment opportunities announced is that all business entities will be eligible for the benefit of deduction for employment of new regular workmen of 50 rather than 100 employees.

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Eligible Donations to Swachh Bharat Kosh and Clean Ganga Fund to be 100% Deductible

The Finance Minister, Shri Arun Jaitley presenting the Budget for 2015-16 in Lok Sabha today, proposed that donations (other than CSR contributions under the Companies Act 2013) to the Swachh Bharat Kosh (by residents and non residents) and Clean Ganga Fund (by residents) will be 100 % deductible under section 80G of the Income-tax Act.

He emphasized on improving the quality of life and public health through Swachh Bharat initiatives. He increased the clean energy cess from Rs. 100 to Rs. 200 per metric tonne of coal etc. to finance clean environment initiatives. Shri Jaitley further raised excise duty from 12 % to 15 % on sacks and bags of polymers of ethylene other than for industrial use. He further introduced an enabling provision to levy Swachh Bharat cess at 2 % or less on all or certain services if required. Shri Jaitley proposed in the budget to exempt services by common effluent treatment plants from service tax. Concessions on custom and excise duty for electrically operated vehicles and hybrid vehicles are to be extended upto 31.03.2016, Shri Jaitley said.

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Effective and Optimal Allocation of Natural Resources and Financial Inclusion Among the Priorities of the Government Enunciated in Budget Speech

The Union Finance Minister Shri Arun Jaitley highlighted some of the priorities of his Government in his Budget Speech in the Lok Sabha here today as follows:

·            Effective & optimal allocation of Natural Resources like coal & minerals through auction for development of people;


·            Financial Inclusion;


·            Health and hygiene for all


·            Care for the Girl Child and their Education


·            Creation of Employment for the Youth


·            Hassle Free Business Environment


·            Delivery of benefits to the poor to be made more efficient


·            Attracting Investments to create Jobs


·            Expanding the job market and ensuring welfare of the labour


·            Improving agri-productivity for generating more income to farmers


·            Energizing the country using all resources including new and renewable energy sources


·            Adoption of  technology-from grass root to the Space


·            Skill India programme


·            Efficiency & better work culture in Government


·            Red tape to Red carpet for ‘Ease of Doing Business’


·            To bring North-eastern parts of the country into the mainstream


·            To promote Pride in the Nation and its Culture




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Indirect Tax Proposals to Maximize Benefits to the Economy

The Finance Minister Shri Arun Jaitley while presenting the Budget announced in the Lok Sabha steps to broaden the Tax Base that will maximize benefits to the economy.

The Service Tax rate is being increased from 12% plus Education Cesses to 14%. The new service tax rate shall subsume the ‘Education Cess’ and ‘Secondary and Higher Education Cess’. Additionally the Service Tax Negative List has been reviewed to include Service Tax to be levied on the service provided by way of access to amusement. Service Tax to be levied on service by way of carrying out any processes as job work for production or manufacture of alcoholic liquor for human consumption. All service provided by the Government to business entities, unless specifically exempt, shall become taxable.

An Excise duty of 2% without CENVAT credit or 6% with CENVAT credit is being levied on condensed milk put up in unit containers. Excise duty of 2% without CENVAT credit of 6% with CENVAT credit is being levied on peanut butter.

The General Exemption under Service tax has been reviewed. Exemption to construction, erection, commissioning or installation of original works pertaining to an airport or port is being withdrawn. Exemption to services provided by a performing artist in folk or classical art forms will be limited only to such cases where amount charged is upto Rs 1,00,000 per performance (except brand ambassador). Exemptions to transportation of ‘food stuff’ by rail, or vessels or road will be limited to transportation of food grains including rice and pulses, flours, milk and salt only. Transportation of agricultural produce is separately exempt which would continue.

Exemptions are also being withdrawn on the following services: (a) services provided by a mutual fund agent to a mutual fund or assets management company (b) distributor to a mutual fund or AMC (c) selling or marketing agent of lottery ticket to a distributor of lottery (d) Departmentally rum public telephone (e) Guaranteed public telephone operating only local calls and (f) Service by way of making telephone calls from free telephone at airport and hospital where no bill is issued

Existing exemption notification for service provided by a commission agent located outside India to an exporter located in India is being rescinded.

Forwards Markets Commission to be Merged with Sebi Forwards Markets Commission to be Merged with Sebi Reviewed by Ajit Kumar on 6:31 PM Rating: 5

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