The Union Budget 2015 - Analysed

Category Positives from Budget Negatives from Budget How to beat the Budget

HNI Tax-free infrastructure bonds to be issued for rail, road and irrigation projects. Additional 2% surcharge will be levied for individuals whose taxable income Issuance of tax-free bonds will offer tax efficient investment avenues for the
Gold Monetisation Scheme to allow investors to earn interest by depositing exceeds Rs.1 crore^. long term.
gold in a metal account. Service tax to be applied on 60% value instead of earlier 40% value of air Investment in gold can be routed through Sovereign Gold Bond. Also, Gold
transport for non-economy class travel. Monetisation Scheme can be used to earn income by depositing physical
Sovereign Gold Bond to be developed as an alternative to purchasing
Service tax plus education cess increased from 12.36% to 14.00%. gold in a metal account.
physical gold.
A sector-neutral Financial Redressal Agency to address grievances against Undisclosed income from any foreign asset to be taxed at maximum marginal Pass-through status to AIFs category 1 & 2 and rental income of REITs
all financial service providers. rate. allows for tax to be levied on investors (unit holders) of these funds and not
Rental income of REITs from their own assets to have pass-through PAN made mandatory for any purchase or sale exceeding Rs.1 lakh. on the funds, thereby eliminating tax ambiguity.
facility^. Service tax to be levied on amusement and theme parks. Also, concerts, Equity mutual funds continue to retain their long-term tax benefits and can
Pass-through status provided to Category 1 & 2 Alternative Investment pageants, award functions, musical or non-recognised sporting events with be beneficial for investors in the category with a long-term investment
Funds (AIFs)^. ticket prices exceeding Rs. 500 to come under service tax ambit. objective.
Reduction in basic customs duty in parts used in LCD/LED TV and digital
video cameras.
Wealth Tax abolished.

SME owner Proposal to reduce corporate tax to 25% from 30% over the next 4 years^. Service tax plus education cess increased from 12.36% to 14.00%. The government has undertaken measures to promote domestic manufacturing
Self-Employment & Talent Utilisation (SETU) to be established to support all Rationalisation and removal of various kinds of tax exemptions and incentives and improve the investment climate.
aspects of business for corporate taxpayers. It has set aside Rs 1,000 crore to setup a Self Employment and Talent Utilisation
Launch of an e-Biz Portal that integrates 14 regulatory permissions at one For domestic companies with income (SETU) programme that will help incubate startups, especially in the technology
source. >Rs.10 crore:surcharge increased to 12% from earlier 10% sector.
Micro Units Development Refinance Agency (MUDRA) Bank to refinance between Rs.1-10 crore: surcharge increased to 7% as against earlier 5% The measures will boost entrepreneurship and self-employment in technology
all micro-finance institutions through a PradhanMantri Mudra Yojana. and manufacturing sectors.
Trade receivables discounting system, an electronic platform to facilitate
financing of trade receivables
Rate of incometax on royalty and fees for technical services reduced from
25% to 10% to facilitate technology inflow.
National Skills Mission through the Skill Development and Entrepreneurship
Ministry to be launched to develop employability among youth.

Young salaried Limit of deduction of health insurance premium increased from Rs. 15,000 to Service tax plus education cess increased from 12.36% to 14.00%. The budget has offered slew of deductions/exemptions. Additional deductions
professional Rs. 25,000 and for senior citizens from Rs. 20,000 to Rs. 30,000^. Excise duty on cigarettes to be increased to 15-25%. like increased limit of health insurance premium, contribution to NPS, higher
Additional deduction of Rs. 50,000 for contribution to NPS under Sec 80 CCD^. Service tax to be levied on amusement and theme parks. Also, concerts, travel allowance etc will reduce tax liability.

Travel allowance increased from Rs. 800 per month to Rs. 1,600. pageants, award functions, musical or non-recognised sporting events with One needs to watch out one’s discretionary expenses considering increase in
ticket prices exceeding Rs. 500 to come under service tax ambit. service tax.
With respect to Employees Provident Fund, employee will get two options – they
Non-furnishing of PAN to EPFS (Employee Provident Fund Scheme) for Issuance of tax-free bonds will offer tax efficient investment avenues for the
may opt for EPF or New Pension Scheme (NPS).
withdrawal before 5 years would attract deduction of tax at maximum marginal long term.
With respect to Employees' State Insurance (ESI), the employee to have option
tax rate.
of choosing either ESI or a health insurance product approved by IRDAI. Investment in gold can be routed through Sovereign Gold Bond.
Excise duty on mineral and aerated waters increased from 12% to 18%.
Contribution to Sukanya Samriddhi scheme to be fully exempt^.
A sector-neutral Financial Redressal Agency to address grievances against all
financial service providers.
Gold Monetisation Scheme to allow investors to earn interest by depositing gold
in a metal account.
Tax-free infrastructure bonds to be issued for rail, road and irrigation projects.
Postal network to be used for increasing access of people to the formal financial
system will benefit rural people.

Retired Limit of deduction of health insurance premium increased from Rs. 20,000 to Service tax plus education cess increased from 12.36% to 14.00%. The Budget has alleviated concerns of senior citizens pertaining to healthcare
individual Rs. 30,000^. and old age costs by providing tax incentives.
Senior citizens above 80 years (not covered under health insurance) will Gold Monetisation Scheme can be used to earn income by depositing physical
get deduction of Rs. 30,000 towards medical expenses^. gold in a metal account.
Deduction limit of Rs. 60,000 for specified disease of serious nature enhanced
to Rs. 80,000 for citizens above 80 years of age^.
Service tax exemption on Varishta Bima Yojana.
Customs duty on artificial heart fully exempted.
A sector-neutral Financial Redressal Agency to address grievances against all
financial service providers.
Gold Monetisation Scheme to allow investors to earn interest by depositing gold
in a metal account.
Postal network to be used for increasing access of people to the formal financial
system.

Home maker Contribution to Sukanya Samriddhi scheme to be fully exempt. Service tax plus education cess increased from 12.36% to 14.00%. People can build a corpus for education and marriage of their girl child through
Nirbhaya fund allocated Rs 1,000 crore. Service tax to be levied on amusement and theme parks. Also, concerts, Sukanya Samriddhi scheme which is treated as EEE (Exempt, Exempt, Exempt)
pageants, award functions, musical or non-recognised sporting events with for tax purposes.
Gold Monetisation Scheme to allow investors to earn interest by depositing
gold in a metal account. ticket prices exceeding Rs. 500 will come under the service tax ambit.
Excise duty reduced to 6% from 10% for upper leather shoes exceeding
Rs. 1,000 per pair.
Basic customs duty on organic LED TV panels reduced to nil from 10%.
Plan to create Unified National Agriculture Market to bring in price stability
in agriculture products used for household purposes.

^Effective from April 01, 2016

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