Income Tax SlabsFM announces no change in personal income tax slabs.Implementation of GAARCommitted to implementing General Anit-Avoidance Rule (GAAR) from April 1, 2017Personal Taxes Ceiling on tax rebate increased by Rs 3,000 for tax payers earning below Rs 5 lakh.Smoking Will Cost You10-15 percent hike in excise duty on tobacco products.Car Owners to Feel the Pinch1 percent tax on luxury goods and cars; infra cess of 1 percent on small cars and 2.5 percent on diesel cars.Startups Get a Boost100 percent tax deduction for new startups for the first three years, promises Jaitley. Relief to Those in Rented HousesDeduction raised from Rs 24,000 to Rs 60,000 under Section 88GFiscal Deficit Targets IntactCrackdown on Black MoneyPenalty to be 50 percent of tax in income under-reporting cases, 200 percent in misreporting of facts.Social SecurityTarget of disbursement under PM’s MUDRA Yojana at Rs 1,80,000 crore for India’s poor.Banking BoostRs 25,000 crore allocated for recapitalisation of public sector banks. Bankruptcy Code to be introduced this year in Parliament. This will provide comprehensive resolution of bank NPAs.Cheer for New Entrants to WorkforceGovernment will pay EPF contribution of 8.33 percent for all new employees for the first three years.Infra Boost in BudgetAllocate Rs 55,000 crores for roads and highways, total investment in road sector would be Rs 97,000 crore. This will be further topped up by additional Rs 15000 crore to be raised by NHAI through bonds. Total outlay for infrastructure now stands at Rs 2,21,246 crore. Jaitley outlines nine pillars to transform India:1) Agri/Farm and welfare2) Rural Focus3) Social Healthcare4) Education and Job creation5) Investments to improve quality of Life6) Infratructure Focus7) Ease of Business 8) Fiscal Discipline9) Tax Reforms‘Plans to Double Farmer Income’Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana Govt is launching a new initiative to provide cooking gas to BPL families with state support 28 lakh hectares to be brought under new farm irrigation planA dedicated irrigation fund worth Rs 20,000 crore to be set up under NABARDRs 35,984 allocated for Agriculture in 2016-175 lakh acres to be brought under organic farming over a three year periodRs 19,000 crore allotted for PMGSYAddressing the Lok Sabha, Jaitley says, “Presenting the Budget at a time when the global economy is in a crisis.” The finance minister lists out some achievements of the NDA government: GDP at 7.6%, economy robust Inflation has declined despite poor monsoonsCPI inflation has come down to 5.4% under our government, despite two poor monsoonsForex reserves are at the highest levelWe need to prioritise our expenditure, given recommendations of 7th CPC and OROP implementationRecapitalisation of banks will be done during next financial yearFarm, rural sector, infra, social sector to have more government expenditureUproar in Parliament as Jaitley tries to present Union Budget.Markets Cautious Ahead of Budget, Banks RallySensex cautious ahead of the Budget speech, Nifty holds 7,000. But public sector bank stocks rally up to 4 percent ahead FM’s speech; SBI gains 5 percent, PNB, Bank of Baroda, Andhra Bank rise 3 percent each.Here are the big numbers to watch for in the Union Budget today: Fiscal Deficit TargetSome analysts say the FM may miss the 3.5 percent fiscal deficit target for FY17.2014-15: 4.1 Percent2015-16: 3.9 Percent2-16-17: 3.5 Percent (Proposed)2018-19: 3.0 Percent (Proposed)Propping up PSU BanksThe government is mulling a ‘bad bank’ for non-performing assets and is looking to infuse more capital into the struggling PSU banks. Corporate Tax RateThe current corporate tax rate stands at 30 percent and was proposed to be cut to 25 percent by FY19. Farm Sector WoesPackages for rural India, increase in investment in irrigation will be key to watch.Divestment TargetWill the divestment target be more realistic this time around?FY15: Budget estimate – Rs 63, 425 crore, Achieved – Rs 31,350 croreFY16: Budget estimate – Rs 69,500 crore, Achieved – Rs 18,300 crore raised so farDirect TaxesLittle is expected by way of further income tax relief after the FM’s gift to the aam admi last year. However, we may see some tinkering on the margins.Indirect TaxesA roadmap on the Goods and Services Tax is expected. The GST was supposed to come into effect from 1 April 2016, but has now catapulted into a political issue now, from an economic one. To transition to GST (which will remove every major tax and duty in India), the FM may hike service taxes again this year - something that won’t go down well with the common man. Last year, Jaitley had hiked service taxes to 14 percent from 12.5 percent.Outlay for Flagship ProgrammesThe FM may announce more steps to prop up the government’s flagship programmes like the Make in India, Digital India, Startup India, Skill India etc.Subsidy RolloutThe oil rout was a major windfall for the Modi government, but the FM may announce rationalisation of subsidies, aided by Jan Dhan-Aadhaar-mobile (JAM) trinity.Modi arrives at Parliament ahead of the announcement of the Union Budget.The finance minister arrives at Parliament. Copies of Union Budget brought to Parliament moments ago.Finance minister Arun Jaitley and minister of state for finance Jayant Sinha at the North Block, leaving for Rashtrapati Bhawan.Here’s the FM with the iconic Budget briefcase. Sand artist Sudarsan Pattnaik makes a sand sculpture on upcoming Budget 2016 at Puri Sea beach of Odisha.Welcome to what is arguably the biggest day of the year in Indian finance. It’s the day the Modi government announces its third Union Budget and finance minister Arun Jaitley is in a decidedly unenviable position. The last two Budgets tabled by Jaitley were largely shied away from any big bang reforms and expectations are low this time around. In his Mann ki Baat address on Sunday, Modi said he was “full of confidence” ahead of his “examination” today. Will the Modi-Jaitley team deliver a surprise? We’ll know in about an hour. Stay tuned to this space for live updates.(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)
Get live updates on Jaitley’s third Union Budget right here.
