-By CA Deepak Valecha – Sr. Manager Audit, UJA

Introduction:  Today the finance minister delivered his fifth & last full budget speech amid the challenging economic conditions, agricultural distress and subdued economic growth. This budget comes in a more crucial time tan compared to previous keeping in mind the upcoming assembly elections in eight states and the general assembly elections within a year.

GDP Growth
During the period of 3 years of Government, India has achieved an average growth of 7.4% in GDP.

Allocations of funds to various sectors:


  1. To allocate Rs. 2,000 Crore fund to set up agriculture market and infra fund to strengthen the market connectivity
  2. To allocation in food processing ministry is being doubled to Rs 1,400/- Crore from Rs. 715 Crore. State-of-the art facilities to be set up in 42 mega food parks
  3. To has been set at 1.5 times of the produce price Kharif MSP. Centre will work with states so that farmers get a fair price.
  4. To allocate Rs. 1,290/- Crore to promote bamboo sector, calling bamboo the green gold.
  5. To allocate Rs 1,000/- Crore to promote Fisheries & aqua culture, animal husbandry fund.
  6. To allocate Rs. 500/- Crore for Operation Green.
  7. To allocate Rs. 200 Crore for cultivation and associated industry.


  1. MSMEs sector gets Rs 3,794 Crores in the form of capital support and interest subsidy by 2022. Every block with more than 50% of ST population will have Eklavya Schools
  2. Target for loan disbursement under Mudra scheme set at Rs 3 lakh Crore for next fiscal
  3. Government is working with different agencies at root level to promote online credit facilities, overdraft and CC facilities to be extended to MSME.
  4. Considerations are also given to setting up a mechanism for ease of decision making over NPAs belonging to MSME.

Health care & Pharma  

  1. Flagship National Healthcare protection scheme, with approximately 50 Crore beneficiaries. Up to Rs 5 lakh per family per year for secondary and tertiary care hospitalization.


  1. Government allots Rs 9,975 Crore for social security schemes


  1. Government to develop 35,000 KM under phase 1 of Bharatmala Project with an outlay of Rs. 5.35 lakh Crore.
  2. Out of 100 smart cities 99 cities have been selected with an outlay Rs. 2.04 lakh Crore


1.Government will expand PM Jan Dhan Yojana to 16 Crore accounts under micro-insurance and pension schemes.


  1. The government has approved a comprehensive textile package providing an outlay of Rs. 7,148 Crores for the textile sector.


  1. Government will spend Rs 16,000 Crore under PM Saubhagya Yojana. 4 Crore poor population of the country will get power connection.

Change with respect to Employees Provident Fund

  1. Under EPF Government will contribute 12% to PF for all employees.
  2. Government to allots Rs. 9,975 Crore for social security schemes

Amendments in Rates of Tax, Exemptions, and deductions under Income tax Act 1961.

  1. No changes in personal income tax slab.
  2. Education Cess increased to 4 % from 3 % to collect additional Rs 11,000 Crores.
  3. Corporate tax rate of 25% extended to companies with turnover of up to Rs 250/- Crore for FY 16-17.
  4. Standard Deduction of Rs. 40,000/- for medical reimbursement & Transport allowance for salaried class.
  5. For senior citizens, exemption of interest income on bank deposits raised to Rs 50,000/- per annum.
  6. Senior citizen limit for investment in interest-bearing LIC schemes currently Rs 7.5 lakh doubled to Rs 15 lakh.
  7. 10 % tax on long term capital gains in excess of Rs 1 lakh.
  8. Cash payments exceeding Rs 10,000 by trusts and institutions will be disallowed in a bid to curb cash economy.
  9. Tax on distributed income of equity oriented mutual funds at the rate of 10 per cent announced.
  10. Government to reduce hardships faced in realty deals; no adjustment to be made in case circle rate does not exceed 5% of sale consideration.
  1. To allow 100% deduction to Farmer producer companies set up along the lines of Co – operative societies having annual turnover of Rs.100/- Crores for a period of 5 years. Further in order to improve TDS compliances by these entities, non-deduction of TDS on such payments shall attract 30% disallowances of such expenditure.
  2. Customs duty on mobile phones to be hiked to 20 per cent from 15 percent.
  3. Customs duty on Televisions to be hiked to 12 per cent from 15 percent.