Finance Minister Arun Jaitley recently presented the Union Budget for 2016-17. There are many unique ways in which the new budget will benefit companies and salaried and self-employed professionals.
Mr. Sanjiv Bajaj, Chairman, Bajaj Finserv, says, ‘The new budget is very balanced, considering the fact that the Finance Minister had to boost growth while simultaneously maintaining fiscal discipline. It gives an opportunity to the Reserve Bank of India to announce a policy-rate cut.’
Aside from working professionals and banks, the policy has benefited the entire country in a number of ways. Here are the top 4 benefits offered by the Union Budget 2016-17.
1. Tax reforms
Tax procedures have been revamped. According to Sanjiv, “New initiatives on taxation include taxing high income assesses through tax on dividends, Securities Transactions tax on options and increased surcharge on individuals with income greater than Rs 1 crore per annum. The various measures to provide relief to small tax payers and with a focus to initiate pension plans and measures to provide affordable housing would assist the lower and middle class”.
2. Fresher air
With the implementation of a 1% service charge on all luxury vehicles, the budget could contribute to reducing pollution in cities.
The cost of luxury cars and SUVs has also been raised, placing a higher barrier on those looking to own one.
Aside from this, there’s now a pollution cess of 1% on small petrol, LPG, and CNG cars, 2.5% on certain diesel models, and 4% on higher-end vehicles.
These changes aren’t going to dramatically reduce the number of vehicles you see on the street. But they give us hope for a brighter, less-polluted future.
3. Better jobs
The new budget introduces a scheme of Rs.500 crores to teach and promote entrepreneurship development among the SC/ST sectors in the economy. This investment is sure to foster the creation of new companies, thus providing work to job-seekers across the country.
Sanjiv is of the opinion that ‘The investment in rural, social, and infrastructural sectors, along with the specified incentives, is sure to create jobs for millions of youngsters joining the workforce every year. The initiatives taken in the areas of education and skill development will definitely enhance the employability of youth across the country’.
The budget also promises to provide entrepreneurial training across various schools and colleges.
4. Lower rent
‘A budget like this, that focuses on agriculture, rural, and social sectors, coupled with tax rebates and the implementation of the 7th pay commission, is likely to provide a strong impetus to consumer spending’, comments Sanjiv Bajaj.
But that’s not the only reason people will be willing to shell out more of their hard-earned money.
With the new budget, professionals now have the benefit of paying lower taxes on house rent. With the tax deduction on house rent increased from Rs.20,000 to Rs.60,000, individuals will have more money left over to meet other financial obligations.
Besides this, an additional Rs.50,000 is deducted for those taking housing loans up to Rs.35 lakh, provided that the cost of the house doesn’t exceed Rs.50 lakh.
While the Union Budget has its benefits, it’ll be a while before the economy is able to get accustomed to it.
‘The continued focus on maintaining a fiscal deficit at 3.5% of the GDP and giving consumers a higher wallet share towards spending should see India achieve its targeted GDP growth in excess of 7.5 per cent in FY17’ says Sanjiv confidently.
The country is rapidly developing in numerous sectors, and the budget is sure to aid that development.