On 29th February 2016, Finance Minister Arun Jaitleypresented his third Union

Budget for 2016-17 citing the acceleration of GDP growth to 7.6%. CPI
inflation has come down to 5.4%.

Before heading
towards the complete highlights of Union Budget lets take brief view on
the history of Union Budget.

Under the Article 112 of the Constitution of India, Union Budget is aka Annual
financial statement. Every year it is presented on the last working day of
February by the Finance Minister of India in Parliament. The budget is presented by
means of the Financial bill andAppropriation bill which has to be passed by the
houses.

Union Budget comes into effect from April 1.

On November 26, 1947, the first Union budget of independent

India was presented by R. K. Shanmukham Chetty.

In 1951-52, C D Deshmukh was the first Indian governor of

RBI who presented the Interim Budget.

In 1958-59, Pandit Jawaharlal Nehru was first PM who

presented the Union Budget.

In 1959, Morarji Desai, who became the finance minister of India,

has presented themaximum number of budgets so far i.e. 10. He

presented two budgets on his birthday 1964 and 1968 as he was

born on February 29.

From 1970 to 1971, Indira Gandhi was only woman Finance

Minister who took over the Finance portfolio.

Union Budget 1973-74 is known as Black Budget of India as

budget deficit rose to Rs 550 crore.

In 1997-98, P Chidambaram presented a Budget that was termed

as Dream Budget.

In 1994, Manmohan Singh started the service tax.

Now, here come the complete highlights of Union budget

Nine pillars of budget Governance and ease of doing business, fiscal

discipline, tax reforms, Agriculture and farmers welfare , Rural sector with
focus on employment,social sector with healthcare, Educational skills and
job creation, Infrastructure and investment & financial sector reforms.

Tax Proposals No changes have been made to existing income tax slabs

Tax relief

Taxpayers with income below Rs. 5 Lakh per year Relief

of 3000 p.a. under section87A.

Taxpayers living in rented houses HRA deduction up from Rs. 24,

000 to 60,000 p.a. under section 80 GG.

Corporate tax

Corporate IT rate for companies not exceeding Rs. 5 crore

turnover has beendecreased to 25% plus surcharge.

New manufacturing companies incorporated on or after 3.2016 to

be taxed at 25% plus cess plus surcharge.

Start up

100% deduction of profits for 3 out of 5 years for startups setup

during April, 2016 to March, 2019 except MAT.

Affordable Housing

100% deduction for profits to an undertaking in housing project for

flats upto 30 sq. metres in four metro cities and 60 sq. metres
in other cities approved during June 2016 to March 2019 and
completed in three years. MAT will apply.

First time home buyers get additional Rs 50,000

deduction for housing loans up to35 lakh, provided cost of house
is not above Rs. 50 lakh.

Service Tax Exemption

For houses built less than 60 square metres.

Services provided under Deen Dayal Upadhyay Grameen

Kaushalya Yojana and by Assessing Bodies empanelled
by Ministry of Skill Development & Entrepreneurship.

On general insurance services provided under Niramaya Health

Insurance Scheme launched by National Trust for the Welfare of
Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple
Disability.

Exemption from service tax for Annuity services provided

by NPS and Services provided by EPFO to employees.

National Pension Scheme

40% of withdrawal at the time of retirement under NPS to

be tax exempt.

Tax on rich

Surcharge on income tax for those with incomes exceeding 1

crore per annumincreased from 12% to 15%.

Tax on Car

1 % infra cess on small cars, 2.5 % on diesel and 4% high

capacity tax for SUVs.

1% service charge on purchase of luxury cars over 10

lakh and in cash purchase of goods and services over Rs. 2
lakh.

MSME Category

Increase the turnover limit under Presumptive taxation

scheme under section 44ADof the Income Tax Act to 2 crores to
bring big relief to a large number of assessee in the MSME category.

Others

Rs 1,000 crore allocated for new EPF (Employees Provident

Fund) scheme.

Krishi Kalyan Cess @ 0.5% on all taxable services, w.e.f. 1 June

2016.

Clean Energy Cess levied on coal, lignite and peat renamed

to Clean Environment Cess and rate increased from 200 per
tonne to 400 per tonne.

Excise on readymade garments with retail price of 1000 or more

rose to 2% without input tax credit or 12.5% with input tax credit.

Excise duty of 1% without input tax credit or 12.5% with input tax
credit on articles of jewellery.

10% rate of tax on income from worldwide exploitation of

patents developed and registered in India by a resident.

Non-banking financial companies shall be eligible for deduction

to the extent of 5% of its income in respect of provision for bad
and doubtful.

Infrastructure and agriculture cess to be levied.

Commitment to implement General Anti Avoidance Rules

(GAAR) from 4.2017.

Excise duty on tobacco increased by 10-15% except beedi.

Basic custom and excise duty on refrigerated containers reduced

to 5% and 6%.
Agriculture and Farmers Welfare Rs 35,984 crore

Govt will reorganize agricultural policy to double farmer income in five years. Here is
the allocation:

Category
Agri credit
Crop Insurance Scheme (PM Fasal Bima Yojana)
Interest subvention for agriculture loans and creation of
new infrastructures for irrigation
Accelerated Irrigation Programme Benefit (AIPB)
Long Term Irrigation Fund will be created in NABARD
Sustainable management of ground water resources

Allocation
Rs 9 lakh crore
Rs 5,500 crore
Rs 15,000 crore
Rs 17,000 crore
Rs 20,000 crore
Rs 6,000 crore

Enhancing of Dairy Farming Rs 850 crore

4 new schemes Pashudhan Sanjivani, Nakul Swasthya Patra, E-Pashudhan
Haat andNational Genomic Centre for indigenous breeds have been introduced
to enhance dairy farming in India at Rs 850 crore.
Other Proposals under Irrigation

Pradhan Mantri Krishi Sinchai Yojana to be implemented in

mission 28.5 lakh hectares will be brought under irrigation.

Promote organic farming through Parmparagat Krishi Vikas

Yojana and Organic Value Chain Development in North East Region.

5 lakh farm ponds and dug wells in rain fed areas and 10 lakh
compost pits for production of organic manure will be taken up
under MGNREGA

Soil Health Card scheme will cover all 14 crore farm holdings by
March.

2,000 model retail outlets of Fertilizer companies will be

provided with soil and seed testing facilities during the next three
years

Unified Agricultural Marketing e-Platform to provide a common

e-market platform for wholesale markets.
Rural Economy Rs 87,765 crore

Below Poverty Line (BPL) Families Rs 2000 crore allocated for 5 years
Government is launching a new initiative to provide cooking gas to BPL families with
state support. LPG connections to be provided under the name of women members
of family.

Other Proposals:

2.87 lakh crore will be given as Grant in Aid to Gram

Panchayats and Municipalities as per the recommendations of
the 14th Finance Commission.

Every block under drought and rural distress will be taken up as

an intensive Block under the Deen Dayal Antyodaya Mission.

A sum of Rs 38,500 crore allocated for MGNREGS.

300 Rurban Clusters will be developed under the Shyama

Prasad Mukherjee Rurban Mission
100% village electrification by 1st May, 2018.

District Level Committees under Chairmanship of senior

most Lok Sabha MP from the district for monitoring and

implementation of designated Central Sector andCentrally

Sponsored Schemes.

A new Digital Literacy Mission Scheme for rural India to cover

around 6 crore additional household within the next 3 years.

National Land Record Modernization Programme has been

revamped.

New scheme Rashtriya Gram Swaraj Abhiyan proposed with

allocation of 655 crore.

Hub to support SC/ST entrepreneurs.

Investments and Infrastructure Rs. 2, 21,246 crore

Total allocation for road construction including PMGSY Rs 97,000 crore

27,000 crore to be spent on roadways.

65 eligible habitats to be connected via 2.23 lakh kms of road.

55,000 crore for roads and highways.

Other Proposals:

100% FDI in marketing of food products produced

and marketed in India.

Shops to be given option to remain open all seven days in a week

across markets.

New Greenfield ports to be developed on east and west coasts

Revival of underserved airports Centre to Partner with States to

revive small airports for regional connectivity

of Disinvestment to be renamed as Dept. of Investment and

Public Asset Management.

Govt will amend Motor Vehicle Act in passenger vehicle segment

to allow innovation.
Banking Rs 25,000 crore towards recapitalization of PSBs

Banking Board Bureau will be operationalised.

Target of disbursement under MUDRA increased to 1, 80,000

crore.

Process of transfer of government stake in IDBI Bank below

50% started (currently its 80%).

General Insurance companies will be listed in the stock

exchange.

Govt to increase ATMs, micro-ATMs in post offices in next 3

years.

Amendments in the SARFAESI Act 2002 to enable the sponsor of

an ARC to hold up to100% stake.

A Financial Data Management Centre to be set up.

Nuclear Power Sector Rs 3000 crore

Govt drawing comprehensive plan to be implemented in next 15-20

years for exploiting nuclear energy.

Govt to provide incentive for deep-water gas exploration.

Education and Skill Development

Higher Education Financing Agency to be set-up with initial

capital base of Rs 1000 Crores.

Sarva Shiksha Abhiyan to increasing focus on quality of

education.

Scheme to get 500 cr for promoting

entrepreneurship among SC/ST.

Digital repository for all school leaving certificates and diplomas.

1,700 crore for 1500 multi-skill development centres.

62 new navodaya vidyalayas to provide quality education

10 public and 10 private educational institutions to be made worldclass.

Digital literacy scheme to be launched to cover 6 crore

additional rural households.

Objective to skill 1 crore youth in the next 3 years under the PM

Kaushal Vikas Yojna.

100 Model Career Centres to operational by the end of 2016-17

under National Career Service.

National Skill Development Mission has imparted training to 76

lakh youth.
Health

A new health protection scheme for health covers upto 1 lakh

per family. Senior citizens will get additional healthcare
cover of Rs 30,000 under the new scheme.

National Dialysis Service Prog with funds through PPP mode to

provide dialysis at all district hospitals.

PM Jan Aushadhi Yojana to be strengthened and 300 generic

drug store to be opened.
Governance and Ease of Doing Business

Ek Bharat Shreshtha Bharat Programme

It will be launched to link States and Districts in an annual programme that connects
people through exchanges in areas of language, trade, culture, travel and tourism.

Other Proposals:

A Task Force has been constituted for rationalisation of human

resources in various Ministries.

Bill for Targeted Delivery of Financial and Other Subsidies, Benefits

and Services by using the Aadhaar framework to be introduced.

Automation facilities will be provided in 3 lakh fair price

shops by March 2017.

Amendments in Companies Act to improve enabling

environment for start-ups.

Price Stabilisation Fund with a corpus of 900 crore to help

maintain stable prices ofPulses.