First cut notes Direct from Budget Live

Here is a post coming from @Mymuneemji on the live interpretation of budget 2015 for #Startups and #Entrepreneurs.

We mainly focus on the Tax highlights in the budget, being tax experts.

Times now calls this as remarkable #SuperBudget. While there is a Stretched sentiment all around. Expectations on one side and agonies of overcommitment on the other.

Sensex is displaying positive mood by +221 points from morning till before the Budget starts and ends flat when it ends. Interpretations crackers due to be seen next week.

Very relevant speach start from Jaitley "Kuch to fool khilaye abtak kuch to fool khilane hai... mushkil hai ki baag me abtak kaate kahi purane hai"

Economic Indicators

• CPI (Consumer Price Index) Inflation projected 5% - Inflation declines - WPI in to negative.
• GDP growth projected between 8% to 8.5% For FY 2015-16.
• Fiscal deficit targets 3% of GDP at the spread of 3 years.

General Highlights

• #Startups will be supported by the #Budget2015 in all aspects with Rs.1000 Cr. being set aside.
• Corporatisation of Ports and other Infrastructure Assets.
• Mudra Bank to refinance the Micro Finance arrangement for Small 
• Disinvestments of PSU for Loss making companies and strategic purposed.
• Going big way with Direct Benefit transfer of subsidies through Jan Dhan and Adhar Schemes.
• Entrepreneurs preferably SC / ST  categories.
• Now you can earn Interest on Metal Account. This will help to bring the savings in form gold in the main stream!! #Budget2015. 
• Trade Receivable Discounting System would be mechanized with electronic system to improve the efficiency and transparency. 
• Pradhan Mantri Bima Yojana and Jeevan Jyoti Yojana shall cover the poor families from accidental / natural death at a very very nominal premiums.
• Unclaimed PPF / EPF funds lying with the government treasury will be used for Senior Citizen Welfare Fund.
• Huge positive fro tourism sector with increment in list of countries covered under arival VISA from 43 to 150.

Tax Provisions

• Black Money comes in preface to Tax Provisions. There is also a Benami Transaction Prohibition bill coming up?? Let's see how does this look.
• Rate of Corporate Tax would be @25% instead of existing @30% over the period of next 4 years. Very courageous decision coming to boost business Scenario.
• Foreign Asset disclosure is taken very seriously. Non-Disclosure to this count would be considered as Crime.
• Permanent Establishment norms undergoing change mainly for Investment Funds.
• Applicability of GAAR is postpones for another two years to foster confidence for Investing in India.
• Wealth Tax is abolished. Again a very courageous decision. Introduction of Supper Rich Surcharge @2%.  
• Domestic Transfer Pricing Limit Increased from Rs.5 Cr. to Rs.20Cr. This allows free Domestic Trade for smaller companies.
• Service tax levy goes up to consolidated 14% from existing 12.36%. This shall bit of disturb services sector. 
• Individual Taxation -

• Medical Insurance deduction limit goes up from Rs.15000/- to 25000/-; Senior Citizen would get upto Rs.30000/-. Deduction towards medical expenditure for very senior citizens (above 80 years of age) would Rs. 30000/-.
• To Provide Social Safety net Sec 80CCD get Rs.50,000 extra deduction.
• Transport allowance exemption is increased from current Rs.800 to Rs.1600 per month for #Salarytax employees.
• Total benefit would be Rs.4.44 Lac for an individual. 

• Yoga to be Included in the Ambit of Charitable activities. This will boost the development of Yoga institutes all around.
• Enactment of Direct Tax Code DTC seems to be of no merit to the existing government. Seems that this government will drop the plans to implement DTC any further.

Finance Minister concludes with a verse from the Upanishads meaning "Let all be happier and healthier"!!

Overall a very well rounded budget. "Genuine mood for Action"

Acche Din - Are you a salaried employee??- Save Rs.10,000 of your income taxes

Budget this year popped late. However the slab rate changes apply to who of year's salary for you.

Read on to save. Share with your HR department and teams to take the benefits. I am sure many have missed out on this even at this juncture and you can save for many along with you. 

An official circular is issued now dt. 10th Dec. Better late than never.

Amendment was in the tax slab.

Although there is no change in the existing tax rate yet new Government had increased the minimum limit from Rs. 2,00,000 to Rs. 2,50,000. There were no changes in the tax slab from last 2 years.

So definitely, this is one of the very important announcements in new finance bill. Following are the tax slabs of Assessment Year 2014-15 & 2015-16.

Table 1: Tax Slabs

Tax Slabs 2014-15		Tax Slabs 2015-16
Income	Tax Rate	Income	Tax Rate
Upto Rs. 2 Lacs	0	Upto Rs. 2.5 Lacs	0
Rs. 2 Lacs to Rs. 5 Lacs	10%	Rs. 2.5 Lacs to Rs. 5 Lacs	10%
Rs. 5 Lacs to Rs. 10 lacs	20%	Rs. 5 Lacs to Rs. 10 lacs	20%
Above Rs. 10 Lacs	30%	Above Rs. 10 Lacs	30%

For senior citizen with Age group of 60 years or above but less than 80 years than their minimum tax limit is Rs. 300,000 instead of Rs. 250,000.

 On the other hand, senior citizen with age of 80 years or more than they do not need to pay tax of initial income of Rs. 500,000.

 Amendment is under section 80C and 80CCC.

Earlier, the maximum qualifying investments for deduction from total income was Rs. 1, 00,000 (even more amount was investment in specified schemes) which was raised to Rs. 1, 50,000. 

 So if no loan is taken by the employee to construct or renovate the house & having total salary income Rs. 5 lacs  than his total taxable income will decline by Rs. 50,000 (after availing this deduction) which is 12.5 % of earlier base income.

 The above conclusion can be examined with below table:-

(A) Person Having Income Rs. 5 lacs with no house loan

Table 2 Before Budget 2014 ( NO House loan is there)		Table 3 After Budget 2014 ( NO House loan is there)
Gross Salary	Rs. 500000	Gross Salary	Rs. 500000
less deduction U/S 80C +80CCC	Rs. -100000	less deduction U/S 80 + 80CCC	Rs.-150000
Taxable salary	Rs. 400000	Taxable salary	Rs. 350000
Loss from HP (due to interest on loan   taken for construction or renovation of house)	0	Loss from HP (due to interest on loan   taken for construction or renovation of house)	0
Net Taxable income	Rs. 400000	Net Taxable income	Rs. 350000

Now tax liability can be calculated as below:-

Table 4 Tax Liability before Budget 2014 ( NO House loan is there)			Table 5 Tax Liability before Budget 2014 ( NO House loan is there)
	Tax Rate	Tax		Tax Rate	Tax
Upto 2 lacs	0	0	Upto 2.5 lacs	0	0
Next 2 Lacs	10%	Rs. 20000	Next 1 Lac	10%	Rs. 10000
Total Tax before surcharge		Rs. 20000	Total Tax before surcharge		Rs.10000
Surcharge	3%	Rs. 600	Surcharge	3%	Rs. 300
Total Tax		Rs. 20600	Total Tax		Rs.10300
			Less: Rebate **		Rs. 2000
			Net Tax		Rs. 8300

  Table 6 Net change in Total tax Structure having gross income Rs. 5 lacs.

Total Tax liability before budget	Rs. 20600
Total Tax liability after budget	Rs.-10300
Net Benefit	Rs. 10300

Rebate u/s 87A of Rs 2000 will also be admissible if the person income does not exceed Rs. 500000.