Budget 2016 - news & discussions

vina · Post by **vina** » 01 Mar 2016 12:46

Govt is having serious dhoti shivering on the taxing PFs after the outrage is has wet it's dhotis. Now expect this to be rolled back.

Aditya_V · Post by **Aditya_V** » 01 Mar 2016 12:49

And expect the 58 year withdrawal limit also to go for Company contribution to PF

vina · Post by **vina** » 01 Mar 2016 13:01

This clueless clown Jaitley needs to be fired. Time to get a person with some real knowledge of what he is doing into the position of finance minister. During his speech, you can see during that at multiple times he was fumbling through all the places and had absolutely no clue on what he was reading, where a seasoned finance guy would be totally at ease .

The Banking system needs to be fixed and Jaitely is not the guy to do it. The paltry Rs 25K crore for that is proof. I would suggest the Govt gets Deepak Parekh in as the FM. Deepak is available for the job and given his background, experience, and stature, he will be a brilliant fit as FM and will drive through the banking system reforms and the structural reforms as well. Trouble is Deepak Parekh has some grey matter in his head and the ideological numbskulls can't tolerate him. Time to kick those buffoons in the gonads, move Jaitely to some other ministry and get Deepak Parekh in as FM.

Singha · Post by **Singha** » 01 Mar 2016 13:03

Jaitleyji - he should be in law ministry being a supreme court lawyer.

vina · Post by **vina** » 01 Mar 2016 13:12

Singha wrote:Jaitleyji - he should be in law ministry being a supreme court lawyer.

Yes. That and the Media Circus Ministry he currently holds as well. Sorry. This govt has completely lost the plot and has been bumbling along from idiocy to idiocy.

I had said that we ABSOLUTELY need major structural reforms. The time for that was right after the govt came into office. Modi should have stood up and said, look, the Congress has driven this country into the ground and we need to do a, b , c, d and e , which are tough , but it should be done. He could have got away with it and we would have been over the hump. But, no, they had to do this idiotic 'Oh we are more Keynesian than the Congress , we will pump prime our way out of trouble' routine and squandered the oil bonanza , where it could have been spent fully in recapitalising the banks , cutting the deficit sharply and if passed on would have ignited consumer demand.

All this would have given serious teeth to the 125bps rate cut that the RBI obliged and the yields would be closer to 6.5% , rather than the close to 8% we are seeing. THAT would have ignited a sentiment turn around and a massive investment boom.

But no, the Govt had to be like the Congress, take your money and go and spend. Net result, interest rates are still very high,banks are in deep doo-doo and inflation still rather elevated.

Singha · Post by **Singha** » 01 Mar 2016 13:28

mallya-ji has sensed the declining fundamentals , taken his $75mil payout, left his soon-to-be-repoed properties with the chowkidar and gone off to live rest of life in london.

Aaryan · Post by **Aaryan** » 01 Mar 2016 13:45

Personally I feel Mr Modi's biggest weakness is his I, Me, Myself attitude.. Aham Bramhashmi means Mai bhi Bramha, here he has taken it as Mai hi Bramha.. If you look closely its clear that Mr Modi is rattled by " Suit boot Ki sarkar" image. More than Nation to be this budget looks to me as Pr exercise for one Person.. I really wonder is this Modi for whom we worked so hard? Again Person before Nation..

abhijitm · Post by **abhijitm** » 01 Mar 2016 14:08

There is a reason why we need an elected politician in key positions. This jetley jas no clue what he is doing. This guy alone going to bring down NDA government in 2019.

negi · Post by **negi** » 01 Mar 2016 14:15

My contempt and visceral hatred for babus went up a notch higher after this year's budget so the bumbling idiots have done nothing to widen the net but ended up taxing the already taxed by bringing even the PF under the tax net. Even a 4th fail will not come up with such an idea .

Aditya_V · Post by **Aditya_V** » 01 Mar 2016 14:17

abhijitm wrote:There is a reason why we need an elected politician in key positions. This jetley jas no clue what he is doing. This guy alone going to bring down NDA government in 2019.

And he has absolutely has no pulse of alary earners. This is a huge self goal.

vina · Post by **vina** » 01 Mar 2016 14:24

My contempt and visceral hatred for babus went up a notch higher after this year's budget so the bumbling idiots have done nothing to widen the net but ended up taxing the already taxed by bringing even the PF under the tax net. Even a 4th fail will not come up with such an idea .

Exactly. The dividend distribution tax in the hands of recipients is another one in this class. The same income is getting taxed THRICE . First at the corporate level, then at dividend distribution tax at company level (15% + surcharge) , and now finally in the latest budget, an additional 10% in the hands of the recipients.

This kind of idiocy is galling. So you have once set of guys who pay taxes and keep taxing those guys over and over again.

And note this . The GPF is not taxed . Only EPF. So the private guys pensions are taxed, not those of the Baboons.

Now if every benefit you get is now taxed as fringe benefit tax. What about the Baboons ? Why are their gadees and bungalows and acco doesnt get taxed as FBT ? Why is a private guys pension and benefits taxable, while that of a Baboon isn't?

negi · Post by **negi** » 01 Mar 2016 14:25

Rahul M wrote:the nudge is towards NPS.

Companies do not contribute to NPS . It has been there for 6 years no one uses it . Issue with government is they just want to come up with redundant systems which do similar stuff and create silos . NPS came in 2009 under Maha moorakh singh it needs to be scrapped as it is no good.

negi · Post by **negi** » 01 Mar 2016 14:30

Our laws specially related to tax and finance are written by those with convoluted minds ; for every tax component there is some other section which has an exemption clause so if I am a businessman making say 25 lakhs pa I can give 20k INR to a good CA and he will file my taxes with almost Zero being paid to GOI as tax because I can show my personal travel, furniture and grocery expenses as business/office expenses however a service class chap will not be able to do any such ghapla.

Another joke I have found in our desh is subsidy to so called 'farmers' on electricity/fertilizers ; I am yet to meet a farmer who has acres of land and makes less money than me or any other middle class or upper middle class chap , the real farmers do not own land they work as labour on a big land owner's land .

negi · Post by **negi** » 01 Mar 2016 14:37

For all the talk about socialism India has done nothing for farmers ; if any government had real desire to increase our agricultural output the government could have taken all it's land which was not demarcated for development and leased it out to farmers willing to work on the field on monthly wages , farmer would not have to worry about a bad monsoon or weather and Government would have bypassed all the middlemen and owned all the produce.

geeth · Post by **geeth** » 01 Mar 2016 14:39

There is some more clarification...it seems they are targetting a section of EPF because of this:

There are about 3.6 crore EPF contributors. Out of that about 3 crores are within 15000/month category. This lot is not targeted in anyway and their contribution will not be taxed..both capital and interest. Of the balance 60 lakhs, there are some highly paid categories..EPF rule limits only the contribution of emplyee to 12.5% of salary, and not that of the employer. The employer can contribute any amount and all is exempted from tax. This way the employer can give a part of salary as EPF contribution and help the employee save the tax. Apparently they wanted to plug this loophole..and ended up with egg on their face. IMO they could have simply put a ceiling on the contribution of employer as well and moved on.

Aaryan · Post by **Aaryan** » 01 Mar 2016 14:45

geeth wrote:There is some more clarification...it seems they are targetting a section of EPF because of this:

There are about 3.6 crore EPF contributors. Out of that about 3 crores are within 15000/month category. This lot is not targeted in anyway and their contribution will not be taxed..both capital and interest. Of the balance 60 lakhs, there are some highly paid categories..EPF rule limits only the contribution of emplyee to 12.5% of salary, and not that of the employer. The employer can contribute any amount and all is exempted from tax. This way the employer can give a part of salary as EPF contribution and help the employee save the tax. Apparently they wanted to plug this loophole..and ended up with egg on their face. IMO they could have simply put a ceiling on the contribution of employer as well and moved on.

This step may be testing the waters. If they succeed they may bring those under 15000 under tax next time and then employers contribution too in near future.. This is how govt screws you..

asgkhan · Post by **asgkhan** » 01 Mar 2016 14:54

I hope congress comes back to power !! This is betrayal of the highest order.

Twitter is abuzz with the scorn heaped on this buffoon and smooth talking Jaitley shmuck !!!

Good luck on 2019 elections.

Dear Namo,

Nobody gives a phuck about your achivements such as
100 % electrification
Swach Bharat Abhiyan
Your FDI proposals
Your ramblings on Mann Ki Baat

The middle class will decimate you and your party in 2019 !!!

Neela · Post by **Neela** » 01 Mar 2016 14:54

Aaryan wrote:
geeth wrote:There is some more clarification...it seems they are targetting a section of EPF because of this:

There are about 3.6 crore EPF contributors. Out of that about 3 crores are within 15000/month category. This lot is not targeted in anyway and their contribution will not be taxed..both capital and interest. Of the balance 60 lakhs, there are some highly paid categories..EPF rule limits only the contribution of emplyee to 12.5% of salary, and not that of the employer. The employer can contribute any amount and all is exempted from tax. This way the employer can give a part of salary as EPF contribution and help the employee save the tax. Apparently they wanted to plug this loophole..and ended up with egg on their face. IMO they could have simply put a ceiling on the contribution of employer as well and moved on.
This step may be testing the waters. If they succeed they may bring those under 15000 under tax next time and then employers contribution too in near future.. This is how govt screws you..

Quite possible. As we become more industrialized, this could become a good revenue stream for the govt.

But a monkey like AJ doesnt know the sentimental/last-resort value of EPF savings to the middle class.
Secondly, AJ doesnt give a sh1t about the middle class support for this govt.Cant win on his own but boy can he do some damage.

member_29350 · Post by **member_29350** » 01 Mar 2016 15:03

For a media savvy PM, this is an absolut shocker. Wasn't there at least one person whose parents are middle class who couldn't see this barfball of an idea?

Forget the technicalities, as one of the posters succinctly put it here

The GOI is going to tax your pensions

is all the ammo that anyone needs. Really,someone has put the budget suitcase into their own mouth instead of just the foot

asgkhan · Post by **asgkhan** » 01 Mar 2016 15:14

I would like to see how the esteemed, intelligent forum members will spin this self goal into a 'chankian' move by the sarkaar.

rakall · Post by **rakall** » 01 Mar 2016 15:37

The Govt must simply retract/retrace this PF tax idea in totality..

and make up to middle class by increasing IT limits in next budget..

A huge self goal in terms of perception..

asgkhan · Post by **asgkhan** » 01 Mar 2016 16:07

http://ekla.in/trends/rollbackepf.html

Good aggregation of tweets ....

vina · Post by **vina** » 01 Mar 2016 16:37

There is some more clarification...it seems they are targetting a section of EPF because of this:

There are about 3.6 crore EPF contributors. Out of that about 3 crores are within 15000/month category. This lot is not targeted in anyway and their contribution will not be taxed..both capital and interest. Of the balance 60 lakhs, there are some highly paid categories..EPF rule limits only the contribution of emplyee to 12.5% of salary, and not that of the employer. The employer can contribute any amount and all is exempted from tax. This way the employer can give a part of salary as EPF contribution and help the employee save the tax. Apparently they wanted to plug this loophole..and ended up with egg on their face. IMO they could have simply put a ceiling on the contribution of employer as well and moved on.

Nonsense. I was watching the CBDT Chief Baboon on TV just a few minutes ago. The finance act of 2016, as it stands , taxes withdrawals at 60% .. period. Forget about the spin put out by the govt in damage control. That is the proposal as it stands, unless, the Finance Bill is modified before it is voted on and approved by the Lok Sabha.

As far as PF goes, it is a compulsory saving . The benefits if any at entry are only under 80C which has an overall limit of Rs 1.5 L (or so I think). Many people are forced to contribute far higher than 1.5L (both individual and employee matching contribution). If the idea is to curtail tax benefits, it would have been simple to say that you contribute only a max of 1.5L and beyond that the matching contribution can be paid out to the employee . Just put the max limit of 1.5L for which you get tax benefit as compulsory and then leave the rest out to the indiviudal to invest or save as they desire. No, the entire purpose of PF is to grab cash from the salaried folks on an assured monthly basis and do the usual dole and spend dog and pony show.

Anyways, it is taxed beyond the Rs 1.5L (overall limit). No, this was simply a way to make sure that they have a "universal" pension scheme , one of Modi's pet wishes and laid the groundwork for that by seizing the PF in perpetuity (with threat of 33% tax on your pension) and doling it out as annuity to everyone else and you get a pittance. This has all the hall marks of Modi's imprint on it. Jaitley and fellow Baboons in the finance ministry just dropped the ball on this.

And no, this is not the the only egregious stuff .The industry is miffed. No one wants to talk about it, but this numbskullness is on par with Pranab Mukherjee's nonsense, the only saving grace is thanks to RBI and the fear of global situation, someone knocked some sense into these jokers to stick to the fiscal deficit target and rein in inflation.

Time to kick out the entire Baboon army in the Finance Ministry. Clueless Jaitley needs to be replaced with someone who knows what to do. And the entire set of Babboons he has placed in the positions there need to be replaced whole scale, starting with Shaktikanta Das , who is a clueless joker of the highest order, obstinate , totally unimaginative, simply dumb , has no clue of the broader picture, incapable of knowing or even understanding if told , and who only knows how to be grubby and grasping in the minutiae of tweaking tax rates and fiddling with tax rates with nary a thought of consequences. And to think that they promoted him from Revenue Secretary earlier to Economic secretary boggles the imagination.

negi · Post by **negi** » 01 Mar 2016 17:48

I see the fig about 15000 INR salary being quoted . Even jawans and police SI will be above that bracket (including allowances), Intial base pay of a bank clerk is 11k INR including allowances this goes up beyond 15 k in private banks this is higher. Only those on the lowest rungs will fall under <15k INR bucket . The argument is like an autowallah not returning your INR 5 change and saying 'what will you do with 5 rupees' ? More than the impact the intent is being questioned here . EPF is not a scheme where crorepatis were hiding their black money or ill gotten wealth it is just a feel good scheme ; by taxing it government has touched hornet's nest , now making a clarification about only taxing the interest will only make things worse.

Issue is not just about public sentiments it is also about intent of the budget ; it has not only failed to widen the tax net it is trying to make up for holes by taxing the same guy again and again .

I didn't see any proposal to stem the rot in real estate say increasing tax on 2nd house or more number of immovable properties . I did not see any proposal or reforms on lines of reducing transaction charge on card payment and instead levying charge on cash deposits in excess of certain figure in banks . Tax on jewelry should have been bumped up. In hospitality business there are huge tax rebates given to folks who run restaurant for first 3/5 years that is why we see the racket in Bangalore where every bar/pub undergoes a management change every 2-3 years they basically change the name and ownership every 2-3 years to claim huge tax savings.

Picklu · Post by **Picklu** » 01 Mar 2016 18:19

The unfortunate situation is that the govt is NOT out to tax your pension. The govt wants you to have a pension which is an annuity and not to take out the entire money lump sum. Taking out entire life savings is NOT pension.

They earlier tried to do the same with NPS via carrot mode but only a few company has shown interest as this is not mandatory and lot of additional operational work for payroll stuff (I know cause I have NPS from KB and my wife tried to start the the same for her company). Opening NPS outside the company robs the major tax benefits and none will do on their own.

Now, the stick is being applied i.e. either take annuity (which is pension) or pay tax if you want lump sum.

The intention is good and can be as revolutionary as JAM but just like JAM won't be successful alone. As JAM needs Jandhan as well Aadhar and Mobile, this would need a few good private and public sector offered annuity schemes.

Declare a few gilt based annuity offered by PSBs and LIC, declare an auto rollover provision for 60% of the corpus at retirement to one of them for all EPF/PPF/GPF/VPF accounts and things are good to go.

None should need more then 40% of retirement corpus for children's education or marriage. Even if education is considered as investment, it should be financed via edu loan rather than parent's life savings. That is the smart and safe way to put the liability on the correct party.

vina · Post by **vina** » 01 Mar 2016 18:59

The unfortunate situation is that the govt is NOT out to tax your pension. The govt wants you to have a pension which is an annuity and not to take out the entire money lump sum. Taking out entire life savings is NOT pension.

The Govt can go shove their heads where the sun doesn't shine. They force you to compulsorily contribute something like 25% of your earnings against your will in most cases (you dont get tax deduction anyways beyond 1.5L), force everyone into it, and then want to tax you after making you contribute against your will ?

Just make the Rs 1.5L mandatory and dont force any contribution above it. Then go do whatever they want with that 1.5L.

Now, the stick is being applied i.e. either take annuity (which is pension) or pay tax if you want lump sum.

NOw watch the stick being applied on the Govt's backside by an enraged public now. This was the topic of the conversation by my Airport Volvo conductor who was complaining against it!

SwamyG · Post by **SwamyG** » 01 Mar 2016 18:59

I was talking to a relative who is in the private equity financial investments area, he thinks the budget is good. As usual like everyone in the business he added 'let us see how it pans out' type of statement. Business leaders think it is a balanced budget. Most importantly there is a clear prioritization, goal setting and road map to achieving the goals. Resource mobilization is another good point.

People are coming around to seeing this as an accelerator for the previously announced schemes.

Rahul M · Post by **Rahul M** » 01 Mar 2016 19:01

^^^ sensex took a big jump today.

Supratik · Post by **Supratik** » 01 Mar 2016 19:16

X-post

Pet pe jab lath lagta hai to political leanings go out of the window. That is true for most middle class people. I don't think it is govts business to dictate how the pensioner will use his retirement money. If he wants to blow up money it is his business. This is a hold back to the nanny socialist state dictating everything. It is not even revenue generating. Please keep up the pressure for rollback on whatever forum available.

vina · Post by **vina** » 01 Mar 2016 19:44

It is not even revenue generating

Dont get taken in by it. The entire PF thing is a grab on cheap long term funds by the govt. The Pension funds have no freedom to invest outside very few Govt directed and Govt owned venues . Forget about what CALPERS and pension funds from Norway and Singapore and others do. The scene in India is light years removed from that .Here it is some run down EPFO, pan stained in the stairways, with strong stench of urine around the boundary wall with an bloated bureacracy and army clerks, with a bunch of Baboons on top, who have never invested in anythign beyond a fixed deposit at best..

It is another form of financial repression like the SLR business of the banks and a grab / first right to the public's savings on a below true cost basis.

vina · Post by **vina** » 01 Mar 2016 19:47

Rahul M wrote:^^^ sensex took a big jump today.

It moved primarily because of ITC,ICICBank, INfosys (each of which has a large weighting , ITC and INFY around 6 to 7%), and the rest of the market short covered on global cues , especially the banks on the back of rate cut expectations.

The bigger news is Yields dropped dramatically as did the rupee, because the market heaved a huge sigh of relief that the Govt has finally reined in it's Bakasur like appetite for borrowing and restricted it below last year's level.

Raveen · Post by **Raveen** » 01 Mar 2016 20:02

asgkhan wrote:I hope congress comes back to power !! This is betrayal of the highest order.

Twitter is abuzz with the scorn heaped on this buffoon and smooth talking Jaitley shmuck !!!

Good luck on 2019 elections.

Dear Namo,

Nobody gives a phuck about your achivements such as
100 % electrification
Swach Bharat Abhiyan
Your FDI proposals
Your ramblings on Mann Ki Baat

The middle class will decimate you and your party in 2019 !!!

Don't get your panties in a bunch son - they want you to take an annuity instead of a lumpsum. This will NOT be the end of NaMo.

soumik · Post by **soumik** » 01 Mar 2016 20:36

http://timesofindia.indiatimes.com/budg ... 210502.cms

This was going to happen, Jaitley probably got an earful too.

SwamyG · Post by **SwamyG** » 01 Mar 2016 20:37

Rahul M wrote:^^^ sensex took a big jump today.

That is why I requested one week of discussion

. Initially the opposition will blast the budget, people who are directly & negatively impacted will want to vent out (like in the political dhaaga - they have the right to vent/comment), and BJP and its supporters will try to support both the defensible and indefensible items. After the dust settles in a day or two hopefully we get the big picture.

Economics as we all know has schools of thoughts on how to solve economic issues, and there are differences. So even economic experts who are trained and align with a particular mode of thinking will either support or flay the budget. And naturally some of these experts will be like the hammer experts who would want to employ hammer to solve most of the problems.

ShauryaT · Post by **ShauryaT** » 01 Mar 2016 20:38

Defence budget: What Arun Jaitley didn’t tell you in his speech

This cannot be good news for defense?

It turns out that the armed forces’ revenue expenditure has gone up but the capital outlay has been slashed in turn. Revenue expenditure has increased by about Rs11,000 crore this year, amounting to an 8.6% increase between budget estimates. This excludes pensions but includes allocations toward the salaries and allowances of both serving personnel and civilian support staff, as well as fuel, consumables and other miscellaneous costs. The Indian army has the lion’s share of the revenue expenses, as its force strength is about nine times that of the Indian Air Force and Navy combined.

However, the budget does not take the Seventh Pay Commission recommendations into account—which will likely be accepted some time in the year.

Revenue expenses have increased by similar percentages in the past even when not accompanied by new pay commissions. Thus, one can expect significant new expenditures on salaries and on pensions that have not yet been allocated for.

Last year, the government had allocated close to Rs86,000 crore as capital outlay, and we learn now that this was revised down to Rs74,300 crore. The latest budget estimate is Rs78,586 crore on capital expenditure. While this is an increase over the previous revised estimate, the ministry of defence has consistently underspent the capital budget for the last several years, with the Indian army’s modernization efforts usually being the most hampered. It is a concern that the final expenditure on defence modernization and capital goods may be much lower than the latest estimate.

SwamyG · Post by **SwamyG** » 01 Mar 2016 20:40

Folks, a gentle request can we keep the politics, and the fall out on elections, Jaitely, Modi, BJP itiyadi outside this thread?

I am saying...can we keep this thread dry onlee.

Vipul · Post by **Vipul** » 01 Mar 2016 20:50

The annual budgetary allocation for Defence has actually gone down in real time basis in comparison to the last year if we account for the increase in inflation.

abhijitm · Post by **abhijitm** » 01 Mar 2016 20:52

Raveen wrote:
asgkhan wrote:I hope congress comes back to power !! This is betrayal of the highest order.

Twitter is abuzz with the scorn heaped on this buffoon and smooth talking Jaitley shmuck !!!

Good luck on 2019 elections.

Dear Namo,

Nobody gives a phuck about your achivements such as
100 % electrification
Swach Bharat Abhiyan
Your FDI proposals
Your ramblings on Mann Ki Baat

The middle class will decimate you and your party in 2019 !!!
Don't get your panties in a bunch son - they want you to take an annuity instead of a lumpsum. This will NOT be the end of NaMo.

Annuity is a bad option for pension.

Rahul M · Post by **Rahul M** » 01 Mar 2016 20:55

negi wrote:
Rahul M wrote:the nudge is towards NPS.
Companies do not contribute to NPS . It has been there for 6 years no one uses it . Issue with government is they just want to come up with redundant systems which do similar stuff and create silos . NPS came in 2009 under Maha moorakh singh it needs to be scrapped as it is no good.

except the small matter of lakhs of govt employees, IOW everyone since 2006.

SwamyG · Post by **SwamyG** » 01 Mar 2016 21:00

Was this posted here?
PPF is on the exemption list, only EPF intetest to attract tax.
http://m.economictimes.com/wealth/tax/b ... 206058.cms