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UNION BUDGET 2014-15 INVESTMENT & TAXATION VIEW POINT.

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Presentation on theme: "UNION BUDGET 2014-15 INVESTMENT & TAXATION VIEW POINT."— Presentation transcript:

1 UNION BUDGET INVESTMENT & TAXATION VIEW POINT

2 UNION BUDGET 2014–15 – BACKDROP First government after 30 years, which has a clear majority of its own. First time in Indian history, people of India voted for development & growth. Tall Expectations from the Union Budget...

3 UNION BUDGET 2014–15 – BACKDROP India needed comprehensive action plan in current economic environment. But Just 45 days to do this all ! Tall Expectations from the Union Budget...

4 UNION BUDGET 2014–15 – BACKDROP Sector2011 – – – – 15 * Agriculture5.0%1.4%4.7%3.3% Industries7.8%1.0%0.4%3.3% Service6.6%7.0%6.8%7.0% GDP6.7%4.5%4.7%5.4% - 5.9% Urgent need to bring the economy on track * Expected GDP Trends & Forecasts

5 UNION BUDGET 2014–15 – BACKDROP World GDP Trends GDP of Gujarat has grown by 10% since 2001

6 UNION BUDGET 2014–15 – BACKDROP Sector2010 – – – – 14 Agriculture14.6%14.4%13.9% Industries27.9%28.2%27.3%26.0% Service57.5%57.4%58.8%59.9% Sources : Central Statistics Office, RBI Shares of Various Sectors of the economy in the GDP

7 UNION BUDGET 2014–15 – BACKDROP Year2011 – – – 14 Wholesale Price Index (WPI) Consumer Price Index (CPI) Effects Interest Rate & Exchange rates. Inflation Rate

8 UNION BUDGET 2014–15 – BACKDROP Gross Domestic Savings as a % of GDP 2009 – – – – – Unfortunately savings diverted to unproductive assets like Gold & Real Estate... Savings Rate

9 UNION BUDGET 2014–15 – BACKDROP Avg. Exchange Rate (Rs.) FDI $ Million 11,83422,06119,81921,564 FII $ Million 30,29317,17026,8914,822 Forex Reserves $ Billion Foreign Exchange Reserve, FDI & FII Flows

10 UNION BUDGET 2014–15 – BACKDROP INR (in crores) $ 156 BillionEquity9,36,000 $ 35 BillionDebt2,10,000 $ 191 BillionTotal11,46,000 Market Cap Rs. in Cr. # as on July Rs. 60 = 1 USD 2009 – July 2014 # Sensex ? Sensex PE ? Market Cap * 62,61,78769,07,78862,45,36564,16,26875,21,05789,98,036 Stock Markets & FII’s FII Holding In India as on date

11 UNION BUDGET 2014–15 – BACKDROP Current Account Deficit Year2012 – – – 15 As a % of GDP 4.7%1.7%2.1% Still remains a concern... Foreign Trade

12 UNION BUDGET 2014–15 – BACKDROP India the top performing market... Country Index India Nifty USA Dow Jones Japan Nikkei UK FTSE China Shanghai Trends in global stock markets

13 We will have to decide UNION BUDGET Should we allow this drift to carry on and watch helplessly? Should we allow our future to suffer because of indecisiveness? Should we be victims of more populisum or wasteful expenditure? - Finance Minister's Speech

14 Important Announcements in the Budget Speech Retrospective amendments to be made with extreme caution and judiciousness in future. Fresh cases to be referred before action to a high powered committee formed by CBDT. Existing cases shall go ahead as they are. GAAR (General Anti Avoidance Rules) deffered? UNION BUDGET

15 Important Announcements in the Budget Speech Real Estate Investment Trusts (REITS), Infrastructure Investment Trusts (INVITS) to become operational. UNION BUDGET

16 Important Announcements in the Budget Speech FDI at 49% in Insurance & Defence with full Indian Management Control through FIPB route. UNION BUDGET

17 Important Announcements in the Budget Speech GST implementation to get priority. DTC to be reviewed. UNION BUDGET

18 Important Announcements in the Budget Speech Kisan Vikas Patras to be reintroduced – banked & unbanked savings. PPF investment limit extended to Rs. 1.5 lac. UNION BUDGET

19 Budget at a glance Rs. Crore2012 – – Budget estimates 1Revenue receipts 8,79,23210,29,25211,89,763 2 Tax revenues (net to centre) 7,41,8778,36,0629,77,528 3 Non - tax revenue 1,37,3551,93,2262,12,505 4 Capital receipts (5+6+7)5,31,1405,61,1826,05,129 5 Recoveries of loans 15,06010,80210,527 6 Other receipts 25,89025,81463,425 7 Borrowings and other liabilities 4,90,1905,24,5395,31,177 8 Total receipts (1+4)14,10,37215,90,43417,94,892 9 Non - plan expenditure9,96,74711,17,90212,19, On revenue account of which, 9,14,30610,27,68911,14, Interest payments 3,13,1703,80,0664,27, On capital account 82,44187,2141,05, Plan expenditure4,13,6254,75,5325,75, On revenue account 3,29,2083,71,8514,53, On capital account 84,4171,03,6811,21, Total expenditure (9+13)14,10,37215,90,43417,94, Revenue expenditure (10+14) 12,43,51413,99,54015,68, Of which, grants for creation of capital assets 1,15,1701,38,2281,68, Capital expenditure (12+15) 1,66,858,1,90,8942,26,781 20Revenue Deficit (17-1) 3,64,2823,70,2883,78,348 (3.6)(3.3)(2.9) 21Effective revenue deficit (20-18) 2,48,5722,32,0602,10,244 (2.5)(2.0)(1.6) 22Fiscal Deficit (16-(1+5+6)) 4,90,1905,21,5395,31,177 (4.8)(4.6)(4.1) 23Primary deficit (22-11) 1,77,0201,44,4731,04,166 (1.8)(1.3)(0.8) UNION BUDGET

20 Where Rupee comes from and where it goes UNION BUDGET

21 Year 2010 – – – – – 15 Estimated Fiscal Deficit 4.9%5.7%4.9%4.5%4.1% Fiscal Deficit UNION BUDGET

22 Year 2007 – – – – – – – – 15 Share of subsidy as a % of GDP 1.3%2.2% 2.4%2.6%2.3% 1.9% Share of Subsidies – as it is, whether it is BJP or Congress UNION BUDGET

23 Defence Outlay Huge opportunity for Indian Industry to tap Defence Sector Total Capital Budget94,588 Total Revenue Budget1,34,412 Total Defence Budget2,29,000 UNION BUDGET

24 Boost to Real Estate Sector REITS to become operational. FDI in Real Estate relaxed. Cheaper credit to low cost housing. Tax deduction limits for Housing Loan interest raised from Rs. 1.5 to Rs. 2 lacs U/S 24. Sec 80 – C Limits from Housing Loan instalment deduction raised. Development of 100 Smart Cities. UNION BUDGET

25 Income Tax Exemption limits for Indi. / HUF raised From 2,00,000 to 2,50,000 From 2,50,000 to 3,00,000 (Person above 60 yrs.) No change – Rs. 5,00,000 (Person above 80 yrs.) Dividend Distribution Tax increased from 15% to 17.64%. Debt based Mutual Fund to qualify as long term capital asset only if held for 36 months and shall be 20% after indexation. UNION BUDGET

26 Income Tax Taxation of REITS – shall be listed on stock exchange will be taxed as Equity Shares. Long term gain – NIL Short term gain – 15% Dividend – NIL Interest – Taxable on slab rates. Investment limit for 15% U/S 32AC reduced to 25 Cr from 100 Cr for investment in Plant & Machinery. Limit for deduction U/S 80C raised from Rs. 1 lac to Rs. 1.5 lac. Limit for deduction U/S 24 raised from Rs. 1.5 lac to Rs. 2 Lac. UNION BUDGET

27 Income Tax U/S 40 (a) (i) for non deduction of TDS, only 30% expenditure will be disallowed. All payments where TDS is supposed to be made now covered. TDS defaults can be reopened parallel with reopening of assessment proceedings. Deductions U/S 54 & 54 F available only for investment in residential house in India. UNION BUDGET

28 Income Tax TDS from insurance policy payments which are not exempt U/S 10 2% on amount exceeding Rs. 1,00,000/-. Powers of the Income Tax Commissioners to cancel the registration of the trust widened. Benefit of 12AA registration to be given retrospectively. UNION BUDGET

29 Income Tax Capital gain exemptions in specified Bonds now limited to Rs. 50 lacs. Cannot be split in 2 years to claim Rs. 1 Cr deduction. Under Section 145 method of computation (not method of accounting) income shall be notified. Where a survey is carried out to verify the compliance of TDS, books of accounts cannot be impounded nor inventory stock, cash valuables can be made. UNION BUDGET

30 Income Tax Advance Ruling Authority for resident tax payers above a defined threshold. To enlarge the scope of Settlement Commission. UNION BUDGET No provision for the same in the Finance Bill

31 Sale of PSU shares to Retail Public Government Plans to sell shares of Public sector undertakings to the tune of Rs. 43,425 Crores. Highest ever target. Plans to sell shares of PSU Banks after retaining 51% holding. UNION BUDGET

32 Budget does nothing to address this issue

33 Interesting allocations in Budget… UNION BUDGET Budgetary allocation to Indian Space Research Organisation (ISRO) at Rs Cr, up by 50%

34 What can derail the dream UNION BUDGET Uncertain monsoon Situation in Iraq Global Economic disturbances

35 “If you have built castles in the air, your work need not be lost… that is where they should be… Now put the foundations under them.” UNION BUDGET P. Chidambaram quoted in his 2008 Budget speech – Henry David Thoreau The Challenge

36 UNION BUDGET In the words of the Shri Atal Behari Vajpayee – quoted by Shri Yashwant Sinha in his Budget speech 1999 – With dreams of prosperity and marching at a stormy pace, the tide of patriotism will not recede. Let the courageous come forward to join me. Finally…

37 Thank you… UNION BUDGET


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