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Union Budget 2016: No change in income tax slab, fiscal deficit target kept at 3.5 %

Vishal Manve | Updated on: 14 February 2017, 5:49 IST

Presenting the 2016-17 Annual Budget, Finance Minister Arun Jaitley on Monday said that amidst slowdown in global growth and trade, the Indian economy has held its ground firmly.

Jaitley listed out the nine pillars on which the Budget stands, which mainly are: farmer welfare, rural sector, social sector, education skills, infrastructure, financial reforms, ease of doing business, fiscal discipline and tax reform.

Here are the highlights from his budget speech

-Take note, there's no change in Income Tax slab.

-Clean Energy cess to be renamed to Clean Environment cess, increased from 200 to 400 Rs/ton of coal

-"I propose to amend customs act to provide for deferred payment of custom duty for importers & exporters within proven track record, says Arun Jaitley."

-"I accept suggestion from Rahul Gandhi on providing relief (exemption of duty on braille paper) to differently-abled people."

-"I propose to abolish 13 different taxes levied by various Ministries in which revenue collection is less than Rs 50 crores per year."

"-To reduce multiplicity of taxes and cascading - 13 taxes with collection less than Rs. 50 Crores a year abolished."

-Excise duty on most tobacco products raised by 10-15 per cent.

-I propose to exempt service tax on general insurance service under Nirmaya health insurance scheme.

-100 per cent deduction of profits for #startups for 3 out of 5 years.

-Krishi Kalyan Cess of 0.5 per cent on all taxable services; Penalty to be 50% of tax in income under-reporting cases, 200 per cent in misreporting of facts.

-To Levy 1 per cent Infra Cess on small Gasoline Cars; Limited tax compliance window: 45 per cent including surcharge, penalties & immunity from prosecution.

-I propose to exempt service tax on services provided under Deen Dayal Upadhyaya gramin kaushalya yojana.

-Limited tax compliance window from June 1 - Sep 30 for declaring undisclosed income at 45% incl. surcharge and penalties.

-Limited period compliance window for taxpayers to declare undisclosed income. Declarations to have immunity from prosecution

-Krishi Kalyan cess to be imposed on all taxable services for agricultural sector.

-Sensex down by 565.70 points, at 22,588.60.

-"Our Govt is completely committed to removing black money from the economy."

-I propose to lower corporate IT rate for next financial year of relatively small enterprises companies with turnovers not exceeding 5 crore in financial year ending March 2015 to 29 per cent per surcharge, says Arun Jaitley.

-Service tax exemption for construction of affordable housing upto 60 square meter under state and central housing schemes.

-Incentives for new manufacturing companies and smaller enterprise companies.

-Service tax exempted for general insurance schemes under Niramayi Swasthya Bima Yojna.

-I propose to increase limit of deduction in respect of rent paid from Rs. 24000 per annum to Rs. 60000 per annum, says Arun Jaitley.

-People who do not have any house of their own and don't get any house rent allowance from their employer get a reduction of Rs. 24000 per annum.

-Committed to implementing GAAR from April 1, 2017.

-Incentives for new manufacturing companies and smaller enterprise companies.

-Relief of Rs 3000 per year to taxpayers with income below Rs 5 Lakh per year. Nearly 1 crore tax payers to benefit.

-General Anti-Avoidance Rule to be implemented from April 1, 2017.

-Presumptive income tax scheme to be extended to all professionals with income of Rs 50 lakh with presumption of 50% profit

-IMPORTANT: Presumptive tax extended in #Budget2016.


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-For tax-payers earning below Rs 5 lakh, ceiling on tax rebate increased by Rs 3,000

-Tax proposals to provide relief to small taxpayers through rebates

-Limit of deduction of rent paid increased to Rs 60,000 per annum.

-Rent deduction raised from Rs 24,000 to Rs 60,000.

- It is time to review working of FRBM Act - Committee to be constituted to study the Act.

-I propose the ceiling of tax rebate under 87A from Rs. 2000 to Rs. 5000.

-Revenue deficit estimate for Financial Year 2015-16 down to 2.5% from earlier estimates.

-160 airports and airstrips can be revived at a cost of Rs 50-100 Crore each.

-Revenue deficit estimate for Financial Year 2015-16 down to 2.5% from earlier estimates.

-FY17 fiscal deficit target retained at 3.5 per cent.

-Plan - non-plan classification of expenditure to be done away with from FY 2017-'18.

-A Bill to amend the companies Act in the coming session to improve ease of doing business.

-Provident fund of 8.33 per cent for new government employees for first three years.

-A bill on targeted delivery of financial services using Aadhar to be introduced.

-We are not interfering in lending and personal issues of the banks.

-Public money should reach the poor and deserving without any leakage.

-We are confronted with stress assets problem in public sector banks which is legacy of past, have already taken many steps in this regard.

-Target of disbursement under MUDRA increased to Rs.180000 Cr; Govt has option to reduce stake in IDBI below 50 per cent.

-Direct Benefit Transfer for fertiliser subsidy on a pilot basis this Financial Year.

-180000 crores target under PM Mudra Yojana for next year.

-I propose to amend the SEBI act 1992 in coming year to provide for more number of benches of Securities Appellate Tribunal.

-Comprehensive Code to be introduced to provide a specialised resolution mechanism for bankruptcy of banks/insurance companies.

-Govt will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in passenger segment.

-Department of Disinvestment to be renamed as Department of Investment and Public Asset Management

-Govt will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in passenger segment.

-100% FDI through FAPB route in marketing of food products produced and manufactured in India.

-A public utility resolution of disputes bill will be introduced during 2016-17.

-Rs 1,000 crore allocated for new EPF (Employees' Provident Fund) scheme.

-To streamline institutional arrangement for resolution of disputes in infra related to construction contracts, public utility contracts, PPP.

-Dept. of Disinvestment to be renamed as Dept. of Investment and Public Asset Management.

-FM Arun Jaitley: Rs 3000 crore rupees earmarked for nuclear power generation 100 per cent.

-FDI will be allowed in the market of food produced and manufactured in India.

-Incentivise gas production from deep sea and high pressure zones.

-85 per cent of stalled road projects back on track; 62 new Navodya Vidyalayas to be opened in uncovered districts under Sarva Siksha Abhiyaan.

-Rs. 1000 crore set aside for higher education financing.

-50000 km of state highways to be taken up for upgradation as national highways.

-If shopping malls are kept open all 7 days of the week, why not small and medium shops. These shops should be given a choice to remain open on all 7 days of the week of voluntary basis

-I have proposed to allocate a sum of Rs 55000 crore in Union Budget 2016 for roads and highways. Will be further topped up by additional 15000 crore to be raised by NHAI through bonds.Total investment in road sec -Rs 97000 crore in 2016-17.

-Retail trade is largest service sector employer in country. Many more jobs are created in this, provided the regulations are simplified.

-35 million job seekers have registered in the National Career Service; 100 model career centres by end of 2016-17.

-Outlay for skills development mission at Rs 1700 crore Vs 1500 crore in FY16.

Arun Jaitley youtube - file.jpg

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-Allocate Rs 55,000 Crores for roads and highways, total investment in Road Sector would be Rs 97,000 crore.

-Objective to skill 1 crore youth in the next 3 years under the PM Kaushal Vikas Yojna.

A national careers service was launched in July 2015. We propose to make 100 model career centres operational by end of 2016.

-Senior citizens will get additional healthcare cover of Rs 30,000 under the new scheme.

-We propose 100 career model sectors. Interlink state employment exchange with national career center.

-Government will launch a new health protection scheme which will provide health cover upto Rs 1 lakh per family.

-National SC/ST Hub to support SC/ST entrepreneurs.

-Health protection scheme will provide 1 lakh rupees for each family with a top up of Rs. 30,000: Arun Jaitley.

-Stand Up India scheme allocated Rs.500 Crores for SC, ST and women entrepreneurs.

-2 projects to be promoted per bank branch per category.

-Rs 500 crore for #standupindia to promote entrepreneurship for SC, ST, women.

-Plan to launch digital literacy mission scheme for rural India to cover around 6 crore additional households in next 3 years.

-Rs 9,000 crores allocated to Swaccha Bharat Abhiyaan.

-I have set aside a sum of Rs. 2000 crores in this year's budget to meet the initial cost of providing these LPG connections

-Dialysis session national dialysis service programme through PPP mode to reduce cost, Jaitley proposed certain dialysis equipments exempt from taxes.

-For rural development as a whole I have allocated Rs 87765 crores in this budget.

-We have decided to embark upon massive mission to provide an LPG connection in the name of women members of poor households.

-LPG connection in the name of women members Rs 2000 crore allocated.

-We plan to launch digital literacy mission scheme for rural India to cover around 6 crore additional households in next 3 years.

-Allocation to PM Fasal Bima Yojana for 2016/17 is Rs. 5500 crores.

-Prof Saibaba sedition case: SC directs Gadchiroli (Maharashtra) court to hold day to day trial.

-Rs 19,000 crore to be allocated for Pradhan Mantri Gram Sadak Yojana

-A dedicated irrigation fund worth Rs 20,000 crore to be set up under NABARD

-300 rurban clusters to be set up under Shyama Prasad Mukherji Rurban Mission

-Will undertake more spending to boost rural economy, protect poor, re-infuse capital into banks

-Government is committed to achieve 100% village electrification by 1st May 2018

-65 eligible habitats to be connected via 2.23 lakh kms of road.Current construction pace is 100 kms per day.

-A common e-market platform to be launched on Babasaheb Ambedkar's birthday. 12 states already onboard.

- Allocation to farming sector at Rs 35,984 Crore; Propose to spend Rs 86,500 crore on irrigation Projects in five years: Arun Jaitley.

- We had to work in an unsupportive global environment, in adverse weather conditions and obstructive political atmosphere: Arun Jaitley.

- Current account deficit has declined from US $18.4 billion in the first half of last year to US $14.4 billion this year- Arun Jaitley.

- Proposed to double farmers' income in five years. We will focus on social sector especially health care, education and skill development: Arun Jaitley.

- Our external situation is robust: Arun Jaitley.

Arun Jaitley's promises:

  • Agriculture double farmers income in five years.
  • Rural employment
  • Social sector and healthcare.
  • Fiscal discipline
  • Tax reforms reduce compliance burden with a faith in the citizenry
  • Governance ease of doing business
  • Additional burden on account of the 7th Pay Commission and OROP; Financial Year 2016-17 to be challenging
  • We converted challenge into opportunity, Inflation has come down to 5.4% from 9 plus, in a big relief to public.
  • The financial year 2017 will be a challenging one for fovernment expenditure.
  • Amidst slowdown in global growth and trade, the Indian economy has held its ground firmly.
  • Foreign exchange reserves are at the highest ever level
  • Our foreign reserves are at the highest level at $350 Billion;CPI inflation has declined to 5.4 per cent.
  • Amid slowdown in global growth and trade, the Indian economy has held its ground firmly.
  • Lot of confidence and hope continues to be build around India.
  • I am presenting this budget when global economy is in a serious crisis. Indian economy has held its ground firmly.
First published: 29 February 2016, 11:12 IST
Vishal Manve @VishalManve12

Vishal Manve handles business and international relations beat for Catch. Previously, he has worked with Scroll.in and Daily News and Analysis and has interned with BBC World News and Gateway House council on global relations. Currently, he is pursuing Law from Government Law College, Mumbai. In his free time, Vishal researches on various aspects of foreign policy, human rights and feminism and looks for people who will share their stories with him.