Highlights of the Union Budget 2015-16

Following are a few highlights of the Union Budget 2015-2016 as tabled by finance minister Mr. Arun Jaitley:

  • Non-Banking Financial Companies registered with the Reserve Bank of India and having asset size of INR 500 crores and above may be considered for notifications as ‘Financial Institution’ in terms of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
  • foreign investments in Alternate Investment Funds to be allowed;
  • tax free infrastructure bonds for the projects in the rail, road and irrigation sectors;
  • target of renewable energy capacity revised to 1,75,000 MW till 2022, comprising 1,00,000 MW Solar, 60,000 MW Wind, 10,000 MW Biomass and 5,000 MW Small Hydro, and 5 new ultra mega power projects each of 4,000 MW;
  • comprehensive bankruptcy code of global standards to be brought in 2015-2016;
  • rationalisation of capital gains regime for the sponsors exiting at the time of listing of the units of Real Estate Investment Trusts and Infrastructure Investment Trusts;
  • changes in Permanent Establishment norms to the effect that mere presence of fund manager in India would not constitute permanent establishment of the offshore funds and thereby encouraging fund managers to relocate to India;
  • domestic transfer pricing threshold limit to be increased from INR 5 crores to INR 20 crores;
  • service-tax plus education cesses increased from 12.36% to 14% to facilitate transition to Goods and Services Tax (GST) and efforts to implement GST next year;
  • distinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments, to be done away with;
  • evasion of tax in relation to foreign assets to have a punishment of rigorous imprisonment up to 10 years, be non-compoundable, and have a penalty rate of 300%;
  • undisclosed income from any foreign assets to be taxable at the maximum marginal rate;
  • mandatory filing of return in respect of foreign asset; and
  • concealment of income in relation to a foreign asset to be made an offence under the Prevention of Money Laundering Act, 2002.