Highlights on the New Budget Benefiting India's Urban Youth

BENGALURU: The Finance Minister Arun Jaitley’s budget proposal for the year 2016-17 is a clear strategy for Indian economy's resilience amidst the current global economic turmoil. He has extended a detailed breakdown of the financial goals of the government for ensuring macro-economic stability and prudent fiscal management and boosting on domestic demand with continued pace of economic reforms. The roadmap for this budget also includes focus on vulnerable sections through funding rural sector schemes and agricultural reforms.

The proposed budget carries several reasons for the urban youth of India from middle to upper class sections of society to be attentive this time. From something as basic as cigarettes becoming more expensive, to entrepreneurial and housing tax breaks, the 2016-17 budget has a lot in store.

Homegrown has selected a few of the beneficial and important clause of this proposed budget, steering away from long-drawn debates regarding the implications of the same, and choosing to focus on the raw clauses themselves. Here is brief look at the breakdown that will affect the urban youth.

Taxation

·         Excise duty has been raised from 10 to 15 percent on all tobacco products apart from beedis.

·         1 percent excise imposed will be imposed on articles of jewelry, except silver.

·         1 percent pollution cess will be levied on small petrol, LPG and CNG cars, and diesel cards of certain specifications will have 2.5 percent, and 4 percent for higher-end models and SUVs.

·         Service tax: 0.5 percent Krishti Kalyan cess to be levied on all services, bumping up the service tax chargeable from 14.5 percent to 15 percent. This is including the Swachh Bharat tax of 0.5 percent, levied as of November 15, 2015.

Personal Finance

·         There will be no changes in the existing income tax slabs, however the ceiling of tax rebate for tax-payers with income up to 5 lakh per annum will be raised from 2000 to 5000 to lessen tax burden. The debate surrounding the controversial EPF (employees’ provident fund) taxation on 60 percent of the withdrawal will be settled at the budget debate in Parliament.

Start-up India

·         Previously, the Prime Minister indicated a three-year tax holiday to the start-up sector in India, and this time the government has allotted a 10,000 crore fund to finance new-age entrepreneurs.

Housing

·         Home loans: For first home buyers, an additional interest deduction of 50,000 per annum for loans up to 35 lakh sanctioned during the next financial year, for houses whose value doesn’t exceed 50 lakh. This deduction is in addition to the 2 lakh deduction already existing on home loans.

·         Housing rent: For those living in rented houses, deduction for rent paid will be raised to Rs 60,000 from the current 24,000.

·         Housing construction: service tax will be exempted for houses less than 60 sq. m.

Education

·         Ten public and ten private institutions will be provided with regulatory architecture to emerge as world-class Teaching and Research Institutions.

·         To setting up a Higher Education Financing Agency, an initial capital base of 1000 crores is allocated.

·         Plan is proposed to set up a digital repository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets.

·         Massive open online courses to be implemented for entrepreneurship education and training.

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