UNION BUDGET HIGHLIGHTS 2016 AIMS IMPORTANCE DRAWBACK

2. MEANING OF BUDGET
• an estimate of income and expenditure for a set
period of time.
• An estimate of costs, revenues, and resources over a
specified period, reflecting a reading of future
financial conditions and goals

3. IMPORTANCE OF BUDGET
For Government
In case of an annual budget of a nation, budgeting is all about
making a blueprint of the overall funds that the concerned
government will spend on various sectors, the kinds of taxes
that would be levied and how the prices of essential
commodities would increase or decrease in the months
ahead. Like any other budget, a government budget too relies
on revenues and expenses. While the revenues are generated
from the various taxes imposed, expenses usually include the
expenditure amount on goods and services, consumption,
investments, retirement benefits, and so on. In the absence of
a good budget, the government officials will have to struggle
hard in developing processes for the same.

4. For Business Organizations
Business organizations have a strong reason for
planning a budget. It helps them in planning targets
for the future, in terms of laying figures that the
organization plans to achieve. It is of no use to plan a
budget with a host of high figures that is practically
unachievable. Similarly, a budget that is too easy to
achieve is also pointless as the business would then
not be making enough progress that it should. Hence,
a good budget is one that is achievable in reality with
the motive of striving for the highest profits. While
most budgets are planned annually, some can be set
for a prolonged period as well. To put the budget into
action, it should be prepared well in advance before
the commencement of the financial year.

5. For Family
The safety and security is the foremost concern for a family.
Hence, planning a personal family budget is highly significant.
Budgeting in a family is simply done by streamlining the
expenses of every family member in accordance to the
overall funds collected by the earning members of the family.
While some people believe the budget to be a complicated
matter of numbers and accounting practices, others assume
planning the budget to prevent them from unforeseen
problems, downfalls and financial losses. The major issue
that comes forward with planning a family budget is that it
limits the control of a person over his/her money. However,
the fact is that budget does not restrict anyone. It, instead,
only guides people towards the allocation of money in
different sectors, such as food, shelter, clothing, household
expenses, medical care, utilities, etc. on a monthly basis.

6. AIMS OF BUDGET
 Reallocation of Resources
 Reducing inequalities in income and
wealth
 Economic Stability
 Management of Public Enterprises
 Economic Growth
 Reducing regional disparities

7. UNION BUDGET HIGHLIGHTS 2016
 Government To Pay Employers’ EPF Contribution of
new recruits For first 3 Years.
 Tax exemption for startup for first three year.
 If you earn less than Rs 5 lakh, you save Rs 3000
more. Per year
 Exemption on HRA (House Rent Allowance) went up
from Rs 24,000 to Rs 60,000
 Income tax levels remain exactly the same
 if you start a food product company you can get 100%
foreign investment

8.  Power prices will rise because a tax on it has doubled
 There’s a 0.5% Krishi Kalyan Cess that you’ll have to
pay on all taxable services
 finance minister allocated Rs. 2.21 lakh crore for
building road and rail infrastructure.
 Rs 9000 cr will be spent on the Swachh Bharat
scheme
 UPA’s MNREGA scheme is getting its highest ever
allocation this year
 Proposes to abolish 13 different Cess Tax

9.  The government will infuse Rs. 25,000 crore into state-
run banks, struggling under a pile of bad loans.
 Government will spend a record Rs. 38,500 crore on
rural jobs programme (MGNREGA). Rural road
development schemes will get Rs. 19,000 crore, while
another Rs. 20,000 crore will be used to fund
irrigation schemes.
 Farmers’ incomes to be doubled in five years by 2022.
Total allocation for agriculture sector has been hiked
to Rs. 35,984 crore.
 Rs 8,500 crore will be spent to ensure every village
has power by May 1, 2018

10. INCOME TAX FOR THE FY 2016-17
Prime Minister Narendra Modi government in its interim
budget presented in July last year had increased the tax
exemption by Rs 50,000 from 2 lakh to 2.5 lakh in the tax
slab for the financial year 2015-16. At present, Rs 2.5-5
lakh income is taxed at 10 per cent, Rs 5-10 lakh at 20
per cent and the 30 per cent rate is levied on income
above Rs 10 lakh. There will be no change in the income
tax slab for the next fiscal.

11. INDIVIDUAL RESIDENT (BELOW 60 YRS)
Income Slabs Tax Rates
Where the taxable income does not
exceed Rs. 2,50,000/-.
NIL
Where the taxable income exceeds
Rs. 2,50,000/- but does not exceed
Rs. 5,00,000/-.
10% of amount by which the
taxable income exceeds Rs.
2,50,000/-.
Where the taxable income exceeds
Rs. 5,00,000/- but does not exceed
Rs. 10,00,000/-.
Rs. 25,000/- + 20% of the amount
by which the taxable income
exceeds Rs. 5,00,000/-.
Where the taxable income exceeds
Rs. 10,00,000/-.
Rs. 125,000/- + 30% of the amount
by which the taxable income
exceeds Rs. 10,00,000/-.

12. Co-operative Society
Income Slabs Tax Rates
Where the taxable income
does not exceed Rs. 10,000/-.
10% of the income.
Where the taxable income
exceeds Rs. 10,000/- but does
not exceed Rs. 20,000/
Rs. 1,000/- + 20% of income
in excess of Rs. 10,000/-.
Where the taxable income
exceeds Rs. 20,000/-
Rs. 3.000/- + 30% of the
amount by which the taxable
income exceeds Rs. 20,000/-

13. Firm
 Income Tax : 30% of taxable income.
 Surcharge : 12% of the Income Tax, where taxable income
is more than Rs. 1 crore. (Marginal Relief in Surcharge, if
applicable)
 Education Cess : 3% of the total of Income Tax and
Surcharge.

14. ADVANTAGES OF BUDGET 2016
List Of Things That Will Be Cheaper
 Planning to buy set top boxes? That will cost you less
now.
 Dialysis Equipment also got cheaper, a big relief for
many patients in country.
 Digital Video Recorders and CCTV Cameras also got
cheaper.
 E Readers, Routers and Broadband Modems
manufactured in India will get cheaper.

15. DRAWBACKS OF BUDGET 2016
List Of Things That Will Be Costlier
 Laptop Desktop and Tablets will cost you more.
 Mobile Phone Call Charges are going to be increased
soon.
 Love Wearing Branded Clothes which costs more than
1000 Rs.? Those clothes will cost you more from now
on.
 Eating Out and Watching movies also goes in this list.
 Travelling by air will be costlier as taxes on aviation
fuel are increased.

16.  Jewelry, excluding silver got costlier after Budget.
 Diesel Cars of all category and all Luxury Cars and
SUVs will become more expensive.
 Bottled Water will get costlier by about 3%.
 As always excise duty on Tobaccos products increased
by 5%. Except Bidis

17. CONCLUSION
Budget 2016-17 reflects Government’s firm commitment to
substantially boost investment in Agriculture, Social Sector,
Infrastructure and employment generation on the one hand
And simultaneously sticking to the fiscal consolidation path.
This is substantiated by a huge 15.3% jump in Plan outlay
and 9% increase in Non Plan outlay in 2016-17over RE
(2015-16) while simultaneously conforming to the fiscal
deficit target of 3.5%.