Corp tax to be cut by 5 pc in 4 yrs; no change for individuals

February 28, 2015

New Delhi, Feb 28: Finance Minister Arun Jaitley today announced a 5 per cent reduction in corporate tax over next four years, abolished wealth tax and replaced it with an additional 2 per cent surcharge on super-rich individuals, while increasing service tax that will result in higher cost of variety of services.

India knock UAE

In the first full-year Budget of the NDA government that shunned populism, he proposed no changes in personal and corporate income-tax rates for 2015-16 but extended benefits to middle-class by increasing the limit of deduction on health insurance premium from Rs 15,000 to Rs 20,000.

For senior citizens, it will go up from Rs 20,000 to Rs 30,000 and for those above 80 years, not covered by health insurance, deduction of Rs 30,000 towards expenditure on medical treatment will be allowed.

Combining these incentives with others including an enhanced deduction of Rs 1.5 lakh on account of contribution to pension fund as against Rs 1 lakh now, the relief of tax deductions under various sections, including 80C and 80CCD, go up to Rs 4.42 lakh.

The transport allowance exemption has been doubled to Rs 1,600. With the levy of 2 per cent additional surcharge, the total surcharge on 'super-rich' individuals with an income of over Rs 1 crore, becomes 12 per cent as against 10 per cent now. In the case of domestic companies having income between Rs 1 crore and Rs 10 crore, it will be 7 per cent and 12 per cent for firms with income above Rs 10 crore.

Presenting the Budget in the Lok Sabha, Jaitley announced fresh measures to tackle blackmoney, including a comprehensive legislation that will make concealment of income and assets abroad a punishment with rigorous imprisonment of 10 years.

Stashing blackmoney abroad will be made a non- compoundable offense, providing for a penalty of 300 per cent of tax on concealed income and assets. The concealed assets and income will be taxable at the maximum marginal rate and no deduction and exemptions will be allowed. It will be made a predicate offence.

In a bid to encourage foreign investors, Jaitley announced deferring of the implementation of controversial GAAR (General Anti-Avoidance Rules) by 2 years.

The Budget also provided for increased funding of Rs 70,000 crore for infrastructure as also higher allocation for social sector schemes like MNREGA.

It decided to re-issue tax-free infra bonds and announced introduction of a sovereign gold bond as an alternative to purchasing metal gold. The bond will carry a fixed rate of interest and will be redeemable in cash on the face value of gold.

The social sector spending for poor and disadvantaged have been kept at allocation of Rs 68,968 crore to education sector, Rs 33,152 crore for health, Rs 77,526 crore for rural development including MNREGA, and Rs 22,407 crore for housing and urban development.

Defence expenditure has been pegged at Rs 2,22,370 crore for 2015-16, up by 11 per cent over Rs 2,46,727 crore in the current fiscal.

The Budget estimates for 2015-16 pegs the non-plan expenditure at Rs 13,12,200 crore and plan spending at Rs 4,65,277 crore. Total expenditure has been estimated at Rs 17,77,477 crore.

Gross tax receipts are estimated to be Rs 14,49,490 crore. Devolution to states will be Rs 5,23,958 crore and states will get Rs 9,19,842 crore. Non tax revenues are estimated at Rs 2,21,733 crore.

The fiscal deficit has been pegged at 3.9 per cent of the GDP in 2015-16 against 4.1 per cent in current fiscal while the revenue deficit has been put at 2.8 per cent of GDP.

The Finance Minister announced plans to bring fiscal deficit down to 3 per cent over the next two years.

In indirect taxes, the Budget reduced basic customs duty on raw materials, excise duty on leather footwear while excise duty on cigarettes is being increased by 25 per cent on cigarettes exceeding 65 mm length and by 15 per cent for cigarettes of other length.

Excise duty on variety of electronics and hardware goods has been reduced. This includes wafers of manufacture of IC for smart cards, mobile phones and inputs for use of LED drivers and LED lights.

100 per cent deduction, other than CSR contributions, has been allowed for donations to Swachh Bharat and Clean Ganga Funds.

While the direct tax proposals will involve a revenue outgo of Rs 8,315 crore, the indirect tax proposals are expected to yield Rs 23,383 crore. The net impact of all tax proposals would be a revenue gain of Rs 15,068 crore.

The education cess of 2 per cent and 1 per cent higher education cess is proposed to be continued in the next year for all tax payers.

Jaitley said the Indian Economy has turned around dramatically in the last nine months with the real GDP growth expected to accelerate to 7.4 per cent, making India the fastest growing large economy in the world.

Growth next fiscal will be between 8 to 8.5 per cent and aiming for a double-digit rate seems feasible very soon.

He said macro-economic stability has been restored and conditions created for sustainable poverty elimination, job creation and durable double-digit economic growth.

India, he said, has now embarked on two game changing reforms -- GST and the JAM Trinity - Jan Dhan, Aadhar and Mobile - to implement direct transfer of benefits.

GST will put in place a state-of-the art indirect tax system by April 1, 2016 while the JAM Trinity will allow transfer benefits in a leakage-proof, well-targetted and cashless manner.

Jaitley said a Monetary Policy Framework Agreement has been concluded with RBI to keep inflation below 6 per cent.

The Finance Minister counted five major challenges faced by the Indian economy which are agricultural income under stress, weak private sector investment in infrastructure, decline in manufacturing, resource crunch in view of higher devolution in taxes to states and maintaining fiscal discipline.

Assuring that the challenging fiscal deficit target of 4.1 per cent of GDP this fiscal will be met, he said the Government was firm to reach fiscal deficit target of 3 per cent of GDP, which will be achieved in three years rather than two years.

Jaitley emphasized on the need to cut subsidy leakages. To achieve it, the Government is committed to the process of rationalizing subsidies.

He said the direct transfer of benefits, started mostly in scholarship schemes, will be further expanded with a view to increasing the number of beneficiaries from the present one crore to 10.3 crore.

An allocation of Rs 5,300 crore to support micro- irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana has been made in the Budget.

In order to support the agriculture sector with the help of effective agriculture credit with a focus on small and marginal farmers, the Finance Minister proposed to allocate Rs 25,000 crore 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.

He said the Government has set up an ambitious target of Rs 8.5 lakh crore of agricultural credit and proposes 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, which will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana.

Announcing new insurance schemes, he said Pradhan Mantri Suraksha Bima Yojana will cover accidental death risk of Rs 2 lakh for a premium of just Rs 12 per year and the Atal Pension Yojana will provide a defined pension, depending on the contribution.

The Pradhan Mantri Jeevan Jyoti Bima Yojana will cover both natural and accidental death risk of Rs 2 lakh on a premium of Rs 330 per year for the age group 18-50.

arun jaitley Corp tax

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
June 25,2020

India has jumped past 4.5 lakh coronavirus cases and 14,476 people have succumbed to the viral infection so far. In this backdrop, speaking to IANS in an exclusive interview, AIIMS Director Randeep Guleria said India is also vulnerable to second wave of coronavirus and people should continue to follow social distancing, wearing mask and other precautions, after cases begin to decline.

He added that in order to contain the outbreak of Covid-19, a limited lockdown in hotspots, where volume of cases is very high, may be considered along with a micro-plan to prevent leakage of cases from these areas to other non-containment areas. Excerpts of the interview are below:

Q: Reports say China and South Korea are witnessing a second wave of coronavirus infection, what is this second wave, is India also vulnerable to this?

A: When cases come down significantly, people tend to drop their guard against the viral infection, and this leads to the second wave (which means a sudden increase in the number of cases). After cases begin to decline, people should continue to follow the precautions -- continue to maintain social distancing and wear masks regularly. See what happened in Singapore, it was struck by a second wave of coronavirus. Look, what happened in the 1918 pandemic, people dropped their guard and the second wave of viral infection struck back. If people do not follow social distancing then the spike in cases is apparent. We need to take these precautions at least for one year. India is also vulnerable to this second wave.

Q: If Covid-19 cases continue to rise rapidly, do you think we need another lockdown in areas where volume of cases are very high?

A: A large volume of cases is concentrated in specific areas like hotspots, and in order to maintain things in order, we may need a limited lockdown in these areas. This should be followed by a micro-plan which entails extensive testing of people and also extensive contact tracing of people who have got in touch with positive people. Need to ensure there is no leakage of cases from these areas. People from these areas should not mix with others in non-containment areas. This will aid in containing the outbreak of the virus. People who have developed symptoms should get themselves tested, especially in the containment areas.

Q: With more than 4.5 lakh cases and close to 14,500 deaths, do you think India has reached its peak and a decline in cases is prominent?

A: The cases will continue to increase for some time. The doubling time of cases has also increased. But, the cases will also begin to flatten. Though, it is difficult to give an exact time period in this viral infection, it seems, the growth in cases will flatten in the end of July or beginning of August. A decline will come to this viral infection, but it does not mean that people should drop their guard. As a measure, we need to decrease community participation and citizens should continue to follow social distancing. People should get themselves tested. All these efforts will help in preventing people from contracting this virus. These precautions will also prevent us from the second wave, and we must continue to take precautions. The virus has not gone away, it is still lurking.

Q: India has crossed the 4.5 lakh coronavirus cases so far, although our recovery rate is good, but still 10,000 to 15,000 cases are reported daily. Why do cases continue to spiral, what is the reason?

A: We have to remember a few things -- the bulk of cases are in 10 cities, nearly 70 per cent, and if we take into account cases per million population, the number is not very high, as compared with countries including countries in Europe. Many European countries put together still do not add up to the Indian population. Do not compare India to countries like Italy, Spain etc. We need to focus on hotspots, which contribute to between 70 -80 per cent of cases, and we have to identify cases in these areas at an early stage. The population density is very high in these cities. People in lower socio-economic status are highly vulnerable to the viral infection, as many live together in small spaces and there is a lot of mixing of people happening there. Look at the market places, people are not following social distancing and not wearing masks. In fact, many are in close vicinity of each other.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
May 24,2020

New Delhi, May 24: The Indian economy is likely to slip into recession in the third quarter of this fiscal as loss in income and jobs and cautiousness among consumers will delay recovery in consumer demand even after the pandemic, says a report.

According to Dun & Bradstreet's latest Economic Observer, the country's economic recovery will depend on the efficacy and duration of implementation of the government's stimulus package.

"The multiplier effect of the stimulus measures on the economy will depend on three key aspects i.e. the time taken for effecting the withdrawal of the lockdown, the efficacy of implementation and duration of execution of the measures announced," Dun & Bradstreet India Chief Economist Arun Singh said.

The report noted that the government's larger-than-expected stimulus package is likely to re-start economic activities.

Besides, measures taken by the Reserve Bank of India like reducing the repo rate by a further 40 basis points to 4 per cent, extending the moratorium period by three months and facilitating working capital financing will also help stimulate the momentum.

Singh said while the measures announced by the government are "positive", most of them have been directed towards strengthening the supply side of the economy, and "it is to be noted that supply needs to be matched with demand", he said.

Besides, "in the absence of cash-in-hand benefits under the government's stimulus package, demand for goods and services is expected to remain depressed", he added.

He further said the loss in income and employment opportunities, and cautiousness among consumers, will lead to a delayed recovery in consumer demand, even after the pandemic. As debt and bad loan levels increase, the banking sector might face challenges.

The report further noted that even as the monetary stimulus is expected to inject liquidity and stimulate demand for a wider section of the economy, the channelisation of funds from the financial institutions will be subjected to several constraints.

The foremost concern being increase in risk averseness, as the balance sheets of firms, households, and banks/NBFCs have weakened considerably and low demand for funds by firms as production activities have been on a standstill during the lockdown period, Singh said.

India has been under lockdown since March 25 to contain the spread of the coronavirus, resulting in supply disruptions and demand compression.

Prime Minister Narendra Modi imposed a nationwide lockdown to control the spread of coronavirus on March 25. It has been extended thrice, with some relaxations. The fourth phase of the lockdown is set to expire on May 31. 

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
Agencies
January 4,2020

Kota, Jan 4: Following the death of an infant in the morning, the death toll in JK Lon Hospital here has risen to 107, officials said on Saturday.

A three-member state government committee of doctors, who was sent to investigate the matter on December 23 and 24, found that Kota's JK Lone Hospital is short of beds and it requires improvement.

However, the committee gave a clean chit to the doctors for any lapses over the recent death of infants admitted there.

A Central government team reached the hospital on Saturday to take stock of the situation.

As per the government report, at least 91 infants lost their lives at the government hospital in December last year.

Meanwhile, the National Human Rights Commission (NHRC) has issued a notice to Chief Secretary of Rajasthan to submit a detailed report within 4 weeks about the steps being taken to address the issue.

The Commission also asked the Chief Secretary to ensure that such deaths of the children do not recur in future due to lack of infrastructure and health facilities at the hospitals.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.