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UNION BUDGET – 2015 - 16 INVESTMENT & TAXATION VIEW POINT.

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Presentation on theme: "UNION BUDGET – 2015 - 16 INVESTMENT & TAXATION VIEW POINT."— Presentation transcript:

1 UNION BUDGET – 2015 - 16 INVESTMENT & TAXATION VIEW POINT

2 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

3 Indian Economy in “Sweet Spot” UNION BUDGET – 2015 – 16 – BACKDROP Better GDP Growth Outlook YearAgricultureIndustryServiceGDP 2012 - 131.2 %2.4 %8.0 %4.9 % 2013 - 143.7 %4.5 %9.1 %6.6 % 2014 - 151.1 %5.9 %10.6 %7.5 %

4 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Inflation on decline Year 2012 – 132013 - 142014 - 15 Whole Sale Price Index (WPI) % 7.56.03.8 Consumer Price Index (CPI) % 9.19.57.0

5 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Exports picking up Year 2012 - 132013 - 142014 - 15 Export Growth - 1.8 %4.1 %4.6 %

6 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Decline in Crude Oil Prices Year 20132014 Present (as on 28-02-15) Average Crude Oil Prices in US$ Brent Crude 108.6499.0262.58 Source : www.eia.gov.in

7 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Decline in Fiscal Deficit (as a % of GDP) 2012 - 132013 - 142014 - 15 4.84.54.1

8 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Relatively stable Exchange Rate 1 Year Before Modi Government54 - 68.50 After Modi Government58 - 63.50 US $ to INR Source : www.rbi.org.in

9 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Tax Collections are getting better (as a % of GDP) 2012 - 132013 - 142014 - 15 Direct tax revenue5.55.65.8 Indirect tax revenue 4.74.34.9

10 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Subsidies on a decline (as a % of GDP) 2012 - 132013 - 142014 - 15 2.52.22.0

11 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Savings (as a % of GDP) 2011 - 122012 - 132013 - 142014 - 15 33.931.130.029.6 Source : The Times of India, Ahmedabad

12 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” Sensex on the rise March 2013March 2014February 2015 188362238629220

13 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” India in the BRICS Pack

14 UNION BUDGET – 2015 – 16 – BACKDROP Indian Economy in “Sweet Spot” First time in recent history Indian GDP growth rate to match up with China

15 UNION BUDGET – 2015 – 16 Budget Speech…

16 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%.

17 UNION BUDGET – 2015 – 16 Important announcements in the Budget Speech Goods & Services Tax to be operational from 01 – 04 - 2016

18 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.

19 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)Central Excise Duty b)Duties of Excise (Medicinal & Toilet Preparation) c)Additional Duties of Excise (Goods of Special Importance) d)Additional Duties of Excise (Textiles and Textile Product) e)Additional Duties of Customs (commonly known as CVD) f)Special Additional Duty of Customs (SAD) g)Service Tax h)Cesses and surcharges

20 UNION BUDGET – 2015 – 16 Goods & Services Tax State taxes that would be replaced by the State GST are : a)State VAT b)Central Sales Tax c)Luxury Tax d)Entry Tax (other than those in lieu of octroi) e)Entertainment Tax (not levied by the local bodies) f)Taxes on advertisement g)Taxes on lotteries, betting and gambling h)State cesses and surcharges insofar as they relate to supply of goods or services

21 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.

22 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.

23 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.

24 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.

25 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.

26 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.

27 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.

28 UNION BUDGET – 2015 – 16 Income Tax

29 UNION BUDGET – 2015 – 16 Income Tax

30 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.

31 UNION BUDGET – 2015 – 16 Income Tax Deduction U/s 80JJAA 30% of additional wages for 3 years. Deduction extended to non- corporate 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.

32 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. Present LimitProposed Limit 1.Self & Family15,000/=25,000/= 2.Parents15,000/=25,000/= 3.HUF15,000/=25,000/= 4.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. 20,000/=30,000/= Deduction U/s 80D.

33 UNION BUDGET – 2015 – 16 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.

34 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.

35 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.

36 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.

37 UNION BUDGET – 2015 – 16 Message

38 UNION BUDGET – 2015 – 16 Thank you... Questions?


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