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UNiON SPECIAL
BUDGET EDITION
2016 INCLUSIVE OF DELHI TIMES | TIMESOFINDIA.COM | EPAPER.TIMESOFINDIA.COM

SMALL CHANGE | Deduction limit for house rent up from
2,000 to 5,000 pm for those not getting HRA, tax rebate
for annual income under 5 lakh increased to 5,000
NOT PROVIDENT | Tax hit in PF on withdrawals for all, and
on employer’s contribution for high-salaried individuals
CAUGHT IN CESSPOOL | New cess on all services to fund
govt’s agri spend, and on all cars to fund infrastructure
LAST CHANCE | New disclosure scheme for black money in
India. Window to be open from June 1 to Sept 30. Tax,
penalty & surcharge to add up to 45% of hidden income
MONEYFESTOI
Did you know that you could split your home loan to
FISCALLY FIT | Fiscal deficit target of 3.9% of GDP for double the benefits and claim deductions on medical
current year to be met, will be reduced to 3.5% next year expenses for your 60-plus parents? TOI’s guide
TRULY RURAL | Big push for agri sector, especially crop shows you how to get more bang for your tax buck
insurance, irrigation; non-farm rural sector also focus area SPECIAL 3-PAGE PLANNER FROM PAGE 6

WAX&WANE
FOR TAXPAYERS
WAX | Withdrawal of up
to 40% of money in NPS
account exempt from tax
Limit of deduction on
rent paid, where employee
does not avail of HRA,
GLOWING IN THE WIND
A cold draft of economic uncertainty is sweeping across the world. The BRICS nations, which once fired up global growth, have caught a chill – all except ‘I’.
With China losing its glow after nearly three decades of red-hot expansion, India burns brightest among the large economies. But with the markets dimming,
increased to 60,000 per
year from 24,000 banks slipping into an area of darkness, exports melting, and consumer demand flickering, the nation needs oxygen in the form of bold reforms and visionary
Govt to make 8.3% contribution towards policies to keep the flame alive. Does this Budget achieve the objective of spreading warmth and light? Or, is this candle also in danger of being snuffed out?
pension fund for all employees with salary up

But it’s bad news

Imaging: Ram

to 15,000/mth for first 3 years of employment

Professionals can pay presumptive tax on
50% of receipts less than 50 lakh per year
Section 87A raises tax rebate to 5,000 from
2,000 on income less than 5 lakh/year
WANE | Surcharge on annual income of
over 1 cr increased to 15% from 12%
for the ‘rich’ as
Exemption to employer’s contribution to
recognised provident funds limited to 1.5 lakh.
Earlier, the cap was up to 12% of salary
govt shifts focus
Sidhartha & Surojit Gupta | TNN

F
FOR INVESTORS
WAX | Period of holding inance minister Arun Jaitley on Monday made a
for computing long term strong push to counter the “suit-boot ki sarkar” tag
capital gains on shares conferred on the government by Rahul Gandhi by
of unlisted companies unveiling a Budget that focussed on wooing farmers
reduced from 3 to 2 years and the poor while conspicuously soaking the “rich”.
No capital gains tax on The Budget speech dwelt on what the FM described as
redemption of sovereign a “transformative agenda” with the farm and non-farm
gold bonds; interest & CG rural sectors getting pride of place, followed by job creation,
exempt under gold monetisation scheme infrastructure and the social sector. Areas like financial
sector reforms, ease of doing business, fiscal discipline and
WANE | 10% additional dividend tax where divi- tax reforms also formed part of the nine pillars of this
dend exceeds 10 lakh per annum
Securities Transaction Tax (STT) for options TOI.COM OPINION POLL
trading hiked threefold from 0.017% to 0.05% SENSEX
RATING THE BUDGET
-152
FOR CONSUMERS FOR ME FOR INDIA
WAX | Limit for value of GOOD GOOD

51% 69%
import of goods in
baggage increased from Sensex hit 52-week
45,000 to 50,000 low of 22,494 before
Service tax on single BAD BAD recovering but still
premium annuity
(insurance) policies
49% 31% ended in negative
territory. Investor
wealth down 56,000cr
reduced from 3.5% to Figures Are Of 2015/16 GDP Growth (%); Source: Official/IMF Estimates. Where Might India Be 10 Years From Now? Turn To Page 14 For Our Forecast. Total responses: 48,000
1.4% of the premium paid in certain cases
WANE | 0.5% Krishi Kalyan Cess to be levied
on all taxable services from June 1, 2016,
raising the effective service tax rate to 15%
Now, a scheme for domestic black money DOUBLE WHAMMY ON PF
Tax on withdrawal
agenda, but ranked lower on the list.
The finance minister opened his speech by referring to
how India had held its own in the face of an adverse global
TEAM TOI economic environment, but there was little thereafter to
1% cess on luxury cars exceeding 10 lakh Voda, Cairn cool to govt’s Settle tax dispute without & employer’s share indicate that the external sector was a source of concern,

T
in value. Infrastructure cess of 1% to 4% on all he government on Monday or how the government planned to deal with it.
deal on retro tax demand any penalty, offers FM
vehicles, depending on engine and fuel unveiled a new scheme to
above 1.5 lakh/yr The somewhat unusual nature of the Budget seemed to
Excise duty on all tobacco products other tackle domestic black money,
T he government reiterated that it
T he Budget moved to end tax dis- leave the markets unsure of how to react, with the indices

T
asking those with undisclosed in- will not resort to retrospective putes totalling about 3 lakh, worth wo proposed changes in the yo-yoing wildly through the speech and finally settling a
than beedi increased to 15%. Excise also up taxation and proposed a one-time Rs 5.5 lakh crore. A taxpayer who has
for branded garments above 1,000 come to come clean by paying tax, treatment of PF hit salaried little lower than on Friday. They may get a boost if the RBI
scheme under which companies like an appeal pending can settle by pay-
surcharge and penalty that add up employees hard. First, for con- cuts interest rates, which is expected shortly.
Vodafone and Cairn can settle dis- ing the disputed tax and interest up
FOR BUSINESSMEN to 45% of the concealed income.
putes by clearing tax arrears. Interest to date of assessment; with no pen-
tributions made to PF accounts The upper middle class and the “rich” were given short
Making the sur prise an- and penalty will be waived if they alty on cases up to Rs 10 lakh. Dis- from April 1, 60% of the corpus shrift: Not only was there no relaxation on tax slabs or exemp-
WAX | Reduced corporate
nouncement, finance minister withdraw pending cases. Neither firm putes above Rs 10 lakh can be settled will be taxable on withdrawal. tion limits, they were hit with an increase in surcharge, from
tax for manufacturing
Arun Jaitley said taxpayers can showed any initial interest. P 4 by paying at least 25% penalty. P 2 So far, all of it was tax exempt. 12% to 15%, on tax on incomes above Rs 1 crore; also, those
companies incorporated clear up their past transgressions Second, your employer’s con- with dividend earnings of over Rs 10 lakh per annum will
on or after March 1, 2016 by paying 30% tax, 7.5% surcharge The compliance window will Modi government, which had iden- tribution beyond Rs 1.5 lakh per now have to pay tax on it. To top it all, there is a new cess – in
Effective corporate tax and 7.5% penalty, adding up to remain open from June 1 to Sep- tified combating black money as a annum will be taxable and you’ll the name of ‘krishi kalyan’ (farm welfare) – on all services
rate for companies with 45% of the undisclosed income. tember 30. Those declaring undis- key focus area in the last elections. pay the tax. For a basic salary of and an infrastructure cess on cars of all sizes.
turnover less than 5cr “Unlike earlier schemes, we closed income can pay the Last year, while enacting a law to say Rs 2 lakh per month, that Interestingly, in a Budget where the political priorities
reduced to 31.96% have imposed a penalty on the amount within two months of target illicit funds stashed overseas, would translate into extra tax of were clear, there was no mention of any specific city or
amount disclosed,” the minister making the declarations. the government had announced a about Rs 44,000 a year. Late night, state either for a project or a sop, a first in recent memory.
Start-ups before April 1, 2019 to be provided
said, adding that no specific target This is the second compliance scheme that helped net disclosures the government said it would
100% deduction of profits for 3 out of 5 years
had been fixed by the government. scheme in as many years from the of over Rs 4,000 crore. clarify on the issue. P 2 Aadhaar to get more teeth, boost for health cover, P 22
WANE | Deduction for R&D to be restricted to
150% from April 1, 2017 and 100% from 2020
DOES THE BUDGET LEAVE YOU BETTER OR WORSE OFF?
GEN-R: BORN IN ’91 With no change in the basic slabs, income and be done with it. No need
Silent reforms:
O n July 24, 1991, a soft-spoken sardar com-
mended his first Union Budget to Parliament
exemptions or tax rates but several to maintain books of accounts.
tweaks in exemptions, the answer If, on the other hand, you’re among
FDI in food retail
by quoting Victor Hugo: “No power on Earth can
stop an idea whose time has come.” That idea
was India, and Manmohan Singh’s game-
will depend on who you are and the seriously well off with an income
what your income is. of over Rs 1 crore a year, you just got
On house rent, for instance, almost hit hard enough to more than offset
W hile the FM announced sev-
eral measures, there were
also some reforms that only found
changing Budget not only kickstarted the econ- everybody gains. As of now, up to Rs all of these gains. The surcharge ap- mention in the Budget documents:
omy, it changed the way Indians live – from how 24,000 per annum paid as house rent plicable on your income tax has been 100% FDI in marketing of
we make our money to how we spend it, from was tax deductible. That ceiling has upped from 12% to 15%, meaning food products produced and
what career we choose to where we holiday and been moved up to Rs 60,000, which your effective tax rate including the made in India. This will help
when we retire. To mark 25 years of reforms, TOI means a tax saving of between education cesses just jumped from international retailers to mar-
profiles six youngsters who were born in 1991
3,708 and Rs 12,793 a 34.61% to 35.54%. That ket food products made in In-
and sees the transformation through their eyes.
year depending on your Income Tax Rate little bit extra means dia. The decision marks the
Meet the ‘Lib Kids’ | Pages 2-13
income level. If you Up to 2.5 lakh NIL you’ll pay Rs 92,700 opening up of multi-brand
earn less than Rs 5 lakh 2.5-5 lakh 10.30% more as tax in the retail in a limited manner.
GAME THEORY a year, you can also cel- 5-10 lakh 20.60% coming year for every
W ith its 1.2-billion-plus population and
$2-trillion economy, India should be among
the lords of the rings at the Olympics. Instead,
ebrate the fact that the
rebate under Sec 87A 10 lakh-1cr 30.90%
crore of income.
What’s left of your in-
FM’S Q&A | P 13
has been raised from 1cr & above 35.54% come after you’ve paid A task force has been set up for
it has consistently been among the also-rans.
Rs 2,000 to Rs 5,000, so *With 3% of tax liability added as income tax will not go rationalisation of human re-
With the 2016 Rio Games looming, TOI takes
that’s another Rs 3,000 education cess and 15% surcharge quite as far as it used to sources in various ministries.
stock of what India must do if we are to become on incomes of 1cr or more
a sporting force to reckon with | Page 15 saved each year. earlier. For starters, This will help realise NDA’s prom-
If you take a loan of up to Rs 35 there’s the 0.5% Krishi Kalyan cess ise of maximum governance with
VIEW FROM THE TOP lakh for a first home costing not on all taxable services. There’s also minimum government.
more than Rs 50 lakh, you can now the infrastructure cess of between Residency permits for large
C Rangarajan, Kumar Birla, Deepak Parekh, deduct up to Rs 50,000 more for inter- 1% and 4% on any cars you buy de- overseas companies. Important
Nandan Nilekani, Jim Rogers and Ashok Gulati est payments on the loans. That’s an pending on the fuel and size of the for ease of doing business. Will
annual tax saving of between Rs engine. A Honda City will cost Rs help foreign companies keep ex-
INSIDE THE BUDGET 5,150 and Rs 17,768, again depend- 30,000-50,000 more, a Toyota In- ecutives in India for longer peri-
What does this Budget mean for you and ing on what your income is. nova Rs 41,000-45,000 more and ods without seeking approvals
your family? What were the political pressures If you are a self-employed profes- a Mercedes S Class Rs 4.5 lakh- from various agencies.
that shaped it? And how will it impact your sional, like a lawyer, doctor, architect 5.6 lakh more. End of an era for tax-free
finances as well as the nation’s fortunes? or interior decorator, and have an an- If you happen to be a smoker, get bonds. No such bonds from next
This special edition analyses the impact and nual income of under Rs 50 lakh, just ready to pay some more with excise year, in line with government’s
implications of the Budget from every pay a presumptive tax on half your duties on cigarettes up too. resolve to cut tax exemptions.
possible angle | Pages 1-18, 21 & 22

BEYOND THE BUDGET BEARHUG SENDS LEO’S OSCAR STOCK SOARING

I stand by Ishrat affidavit, says Chidambaram:
No video proof
IN THE SPOTLIGHT
Ex-home minister P Chidambaram on Mon-
day said he stood by the second affidavit in
(L to R) Mark against Kanhaiya,
Rylance (best
the Ishrat Jahan encounter case | Page 23
supporting actor), cops tell Delhi HC
Telcos must pay for call drops, says HC: The
D
Brie Larson (best elhi Police admitted before
Delhi high court on Monday upheld Centre’s actress), Leo
decision that telcos must compensate mobile the high court
DiCaprio (best on Monday that it
users for frequent call drops | Page 23 actor) & Alicia did not have any
Petrol price cut by 3, diesel’s up 1.5: IOC Vikander (best video evidence of
on Monday cut petrol price by 3.02/litre, supporting actress). JNUSU chief
but raised diesel by 1.47. Petrol in Delhi now h Spotlight won the Kanhaiya Kumar
costs 56.61, diesel 46.43 | Page 23 best film award raising anti-na-
FULL COVERAGE tional slogans.
Bassi, Thampu call it a day: Delhi top cop
P 22 & Delhi Times The court will now decide on his
B S Bassi retired on Monday. A K Verma is
bail plea on Wednesday, reports
the new police chief. St Stephen’s principal
Valson Thampu also retired | Pages 19 & 20 ➤After 5 previous nominations, DiCaprio ➤Alejandro Iñárritu (The Revenant) first Abhinav Garg. Police, however,
finally won an Oscar for The Revenant, a since 1950 to win best director 2 yrs in a row claimed they had testimonies of
Pak hangs Salman Taseer’s killer: Pakistan revenge saga of a man left for dead after ➤Asif Kapadia won best documentary three witnesses to bolster the al-
on Monday executed ex-policeman Mumtaz a bear attack. He was the only winner for Amy. Sajan Skaria part of team that legation that Kumar had led the
Qadri for assassinating then Punjab governor allowed to exceed his allotted speech time worked on best animated film Inside Out protests where anti-national slo-
Salman Taseer in 2011 | Page 24 gans were raised. P 19