Arjuna (Fictional Character): Krishna, Honorable Finance Minister Mr. Arun Jaitley will declare Finance Budget of 2016-17 on 29th February in the Loksabha. As it is 2nd budget in the tenure of P. M. Modi, everyone is excited for the Budget. What's there in Magician Jaitley's "Potli" (Bag) this year?
Krishna (Fictional Character): Arjuna, ha ha.. good Jaitleys 'Potli'. Budget in simple language, is a financial document used to estimate future revenue and expenses of the upcoming year. Governments revenue and finances works on the basis of this document. This means that efforts are taken to either earn projected or more revenue. Also plans are made to manage the expenditure up to the projected limit. Arjuna, an individual check whether a product is in his budget or not when he goes shopping. Monthly or yearly total of these revenues and expenses is tracked through budget. Everyone should make their own household and business budget and accordingly decide their standard of living or business strategies, otherwise financial crises arise in life. Lot of expectations are there from budget, like to keep GDP high, Increase Govt. Expenditure in Infrastructure, Housing and Education sector. Further Start Up, Make in India, etc needs to be boosted. Lots of Complexity is there in economic world and its effect on India. It's like walking on tight rope. Arjuna: Krishna, which are different types of Budgets and what is there importance for
Arjuna: Krishna, which are different types of Budgets and what is there importance for common man?
Krishna: Arjuna, generally Budget is prepared by everyone, by a child to an old man, by Household to Nations, by profit-making entities to social working nonprofit-making entities.
The types of Budget are defined on the basis of their uses. e.g. Personal Budget, Zero Budget, performance Budget, Revenue Budget, Capital Budget, Cash Budget, etc.
From this one can conclude three major types of budgets; they are
1) Family Budget,
2) Business or Profession Budget and
3) Union or State Budget.
Nation's budget is prepared majorly in two parts Finance Budget and Railway Budget. There are two parts in budget revenue and expenses. Revenue is received by government in form of tax from tax payers and expenses are amount given to different departments for country's management and development. In budget expected changes in direct and indirect tax laws is given and finance minister releases it in lok sabha on 29th Feb. This is termed as finance bill. Deep discussion is made on this budget in Lok Sabha and Rajya Sabha on budget issues and after implementation of proper notices and corrections if any, sign of honorable president is taken and accordingly budget is passed and accordingly amendments and changes are made in tax laws and are brought in effect.
Arjuna: Krishna, in case of direct taxes which things are expected in Jaitley's potaly for common man?
Krishna: Arjuna, direct tax mainly includes Income Tax. In Income Tax mainly following changes are expected.
1) In order to charge less tax to common man, slab rate of income tax should be changed to zero tax on income below 3 lakhs, 10% tax on income from 3 to 10 lakhs, 20% tax on income from 10 to 20 lakhs and 30% tax on income above 20 lakhs.
2) People paying more tax should be given gold card, platinum cards and accordingly should be provided with different benefits, facilities.
3) A single income tax return should be given in place of existing various types of returns.
4) In last year's budget speech honorable finance minister had said about reducing corporate tax. It should be reduced.
5) For TDS return filling time period should be extended from 15 days to 30 days.
6) TDS deduction limit should be increased. For e.g. in case of professional services limit should be increased from Rs.30 thousand to Rs. 1 lakh.
7) Form 15 G and 15 H for non deduction of TDS should be made available online.
8) If taxpayer invest in shares of company then as per section 14 A expenses incurred on it are disallowed. This will hamper the investments in the company, so this provision is required to be amended.
Arjuna: Krishna, in case of indirect taxes which things are expected in Jaitely's "Potli" for common man?
Krishna: Arjuna, in indirect taxes excise, custom, service tax is mainly covered.
Let's see expected changes in service tax:
1) Government should take steps to bring GST in existence, and take measures for implementing GST. Because of this people will get relief from many hassles of taxes and businesses will boost.
2) According to service tax rules, if services are provided till 10 lakhs no service tax is charged. This limit should be increased to 25 lakhs. Because of these small service providers will get relief from provisions of tax laws.
3) Similarly, for small service providers a scheme like composition scheme in VAT should be started. Like if yearly turnover is till 1 crore then 2% service tax should be charged. Because of which payment of tax and compliance of law will become easy.
4) A system like J1, J2 in VAT and TDS in income tax should be started in which service receiver will come to know whether service provider has paid service tax or not. Because of which tax defaulters will be identified.
5) Interest of 30% is charged on late payment of service tax which should be reduced to earlier rate of 18%. This oppressive way of collecting interest should be reduced.
6) No late fees should be charged on late filling of NIL returns. Because of which no late fee will be payable if there is no business.
7) On rent from immovable property service tax should be exempted or abatement of 70% should be given. Because of which black money will be reduced and rent income will be properly taken in total income.
8) Service tax on director's remuneration should be exempted.
Arjuna: Krishna, what should one learn from this concept of Budget? Krishna, what should one learn from this concept of Budget?
Krishna: Arjuna, living within a particular Budget refers to living a Balanced Life. The thought of "Cut your cloth according to your coat" should be followed. Expenditure should be made considering the income. Loan should be taken up to a certain extent otherwise financial complications may arise. Keeping a Budget is the best way to run a Home, a Business and a Country. An individual many times is worried about the Country's Budget, Business Budget and forgets about own Family Budget. Most important is the Family Budget because it can be controlled by us.
Whereas others have control over the Business Budget and the Union Budget is completely in the hands of Government. Likewise of growth, if one keeps its own family budget in control, then in turn will help for growth of his country.
Let's hope Jaitley's 'Potli' will be beneficial for all. Let's think "Aam toh aam gutli ka bhi daam, Jaitley ki potli sabka kare kaam".