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UNION BUDGET 2015-16 THOUGHTS AND HIGHLIGHTS

Service Tax - By: - Dr. Sanjiv Agarwal - Dated:- 3-3-2015 - Economy If Economic Survey for the year 2014-15 is to be believed, India has overturned its economic growth pattern to positive and its Gross Domestic Product (GDP) is expected to grow at 7.4 percent in current fiscal. Based on normal monsoon; economic, fiscal and industrial reforms and lower oil prices, it is expected that our economy will grow in the range of 8.1 - 8.5 percent in 2015-16. The economic analysis about Indian economy is .....

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and host of socio-economic measures taken recently and those under way. The industrial growth which is (-) 0.1 percent in 2014-15 (10 months) is likely to grow @ 2.1% in 2015-16. While the inflation is presently contained and under control at below 6 percent, it may go up soon, one the tax proposals in Budget are implemented as many of those would lead to price rise. Budget The Union Budget for 2015-16 as announced in Parliament on 28th February 2016 claims to be aimed at accelerating growth, e .....

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ic note, introduction of common Goods and Services Tax (GST) could be a game changer. The economic situation is therefore upbeat, on a rise and forward looking so far as growth and reforms are concerned. So far as goods and services are concerned, there are many items on which excise duty has been increased from 6% to 12% including mobile handsets. On certain input and raw materials, duties have been rationalized or hiked. On Service Tax front, Government has been too harsh and aggressive as it .....

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e, not on tax. So, the effective Service Tax rate would be 16 percent which is 133 percent of earlier tax rate of 12%. This is just not expected from a Government that claims to be concerned about its people. This will surely lead to inflationary trend. Value of services will also go up as all reimbursements shall be part of value which will be subjected to tax. To expand scope of Service Tax levy, negative list of services has been pruned and many exemptions curtailed. Service Tax shall now be .....

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he highlights of Union Budget 2015-16 touching upon economy and various tax proposals - Economy Indian economy (GDP) grew @ 7.5% in 2014-15 Expected to grow at 8.1- 8.5 in f.y. 2015-16 Current inflation rate at 5.1% Inflation to be contained below 6% Net tax revenue grew @ 16.9% in 2014-15 Stable Indian rupee Direct Tax revenue as % of GDP at 5.8% Indirect tax revenue as % of GDP at 4.9% Road map to target fiscal deficit of 3% of GDP in next three years (by 2018) Banking sector reforms .....

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limit Separate law for black money Direct tax proposals to yield net loss of ₹ 8315 crore. Corporate Tax rate to be reduced from 30% to 25% over four year period Transport allowance deduction up from ₹ 800 pm to ₹ 1600 pm Additional deduction under National Pension Scheme (NPS) of ₹ 50,000. Tax payers can achieve upto ₹ 4,44,200 tax exemptions under various schemes (based on investments) Health insurance and other benefits under section 80D and 80 DDB hiked .....

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years 100% tax exemption for contribution to Swachh Bharat initiative Service Tax Service Tax target for financial year 2015-16 fixed at ₹ 2,09,774 crores Net indirect tax proposes to yield ₹ 23383 crore Rate of Service Tax up from 12 percent to 14 percent Education cess and secondary and higher education cess subsumed in GST A new levy called Swachh Bharat cess levied @ 2 percent of tax value (in nature of Service Tax) Effective rate of Service Tax including Swachh Bharat ces .....

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