Spend, Save and Invest Smartly

Union Budget 2015-2016



Investing in the new pension scheme?

  • Present limit of INR 1 Lakh per year under Section 80 CCD hiked to INR 1.5 Lakhs per year. This is over and above the deduction already available on INR 1.5 lakh under section 80C.
  • You can reduce your tax liability by making your employer contribute more towards your NPS and make use of this enhanced limit.
  • You can enjoy this benefit (Additional deduction of INR 50,000 over and above Section 80 C only if your employer makes the contribution to the NPS).
  • The accumulated corpus at the time of withdrawal will continue to be taxable.

Pension

  • India to be made a pensioned society.
  • Atal Pension Yojana a low-cost pension scheme to provide a defined pension to its subscribers to be launched on 1st June in the age group of 18-40.
  • Citizens in unorganized sector will get a pension of INR 1000-5000 per month after 60 years of age. Minimum contribution to be for a time period of 20 years.
  • Government will contribute up to 50% of the premium you pay which is restricted to INR 1,000 per year or lower for 5 years.
  • Government contribution benefit will be given only if you open the Atal Pension Yojana account before 31st December 2015.
  • One rank one pension' as said in the last budget will be implemented for defence personnel.

Gold

  • To develop a sovereign gold bond as an alternative to physical gold.
  • Gold monetization scheme for depositors of gold to earn interest and jewelers to obtain loans on their metal accounts.
  • Indian gold coin to be developed which will carry the Ashok Chakra on its face, to reduce the demand for foreign coins.

REIT (Real Estate Investment Trust)

  • Proposal to rationalize capital gains tax regime for sponsors of newly-created business structure REITs.
  • Proposal that the rental income arising from real estate assets directly held by the REIT would be allowed to pass through and to be taxed in the hands of the unit holders of the REIT.

Banking

  • Mudra Bank (Micro Units Development Refinance Agency) to be created with a corpus of INR 20,000 Crores for microfinance. Banking for the unbanked to be the focus.
  • Focus on making India a cashless society by incentivizing card transactions.
  • To set up autonomous bank board bureau to select PSU heads.
  • Non-banking financial companies (NBFCs) registered with the Reserve Bank of India (RBI), and those of INR 500 crore size or more, to be allowed to use The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act 2002 like any financial institution.

Infrastructure and Ports

  • To sanction 1 lakh km of new roads.
  • Investment in Infrastructure will go up by INR 70,000 Crore in 2015-16.
  • Plan to auction infra projects in Plug and Play mode. Plug and play means infra projects with approved clearances (Environmental and others) before auction.
  • PPP model to be revised and the Government to bear majority of the risk.
  • Ports will be encouraged to corporatize and become companies under Companies Act.
  • National investment infrastructure fund to be set up.
  • Proposes 5 "ultra mega" power projects for 4,000 MW each worth INR I lakh crore in plug and play mode.

Education

  • INR 68,968 Crore allocated to the education sector.
  • Nayi Manzil scheme launched which will enable minority youth to obtain school leaving certificate and gain better employment.
  • Fully IT based student financial aid scheme launched for higher education.
  • AIIMS to be set up in Jammu and Kashmir, Punjab, Tamil Nadu, Assam. AIIMS-like institution for Bihar. IIT in Karnataka. IIMs in Jammu and Kashmir, and Andhra Pradesh to be launched.
  • PG institute of Horticulture set up in Amritsar. Indian School of Mines in Dhanbad to be upgraded to IIT status.
  • Kerala to have a University of Disability Studies.
  • Centre for Film Production and Animation set up in Arunachal Pradesh.

A set of reforms

  • A Proposal to create a universal social security system for all Indians.
  • A comprehensive bankruptcy code expected in FY 2015-16.This means defaulters have no room for escape from their lenders.
  • Retrospective tax provisions to be avoided.
  • Forward Markets Commission (The commodity regulator) to be merged with SEBI.
  • INR 1,000 Crore as an additional allocation to the Nirbhaya Fund.
  • Different types of foreign investment like FPI and FDI to be replaced with a comprehensive type. Proposal to do away with different types of foreign investment caps and replace them with composite caps. No MAT (Minimum alternate tax for FII’s).
  • Housing for all by 2020 and setting up of a public debt management agency.
  • Yoga included under charitable activities.
  • Atal Innovation Mission for entrepreneurs and researchers to foster a culture of innovation and INR 150 Crore set aside for this.
  • Government proposes to create a senior citizen welfare fund with unclaimed deposit of INR 9000 Crore in Public Provident Funds and Employees' Provident Fund schemes.
  • Service tax exemption will be provided on Varishta Bima Yojana to benefit senior citizens.
  • INR 1500 Crore allocated for the National Skills Mission for skill development and entrepreneurship.
  • Benami property transaction bill to tackle black money in real estate.
  • FEMA allows seizure of foreign property and assets.
  • To allow tax pass-through for Alternative investment funds. Alternative investment funds are REIT, Private equity and hedge funds
Financial Planning
Tax Planning
Investment Planning