Union budget of India

The Union Budget of India, referred to as the Annual Financial Statement in Article 112 of the Constitution of India, is
the annual budget of the Republic of India, presented each year on the last working day of February by the Finance
Minister of India in Parliament. The budget, which is presented by means of the Financial Bill and the Appropriation bill
has to be passed by the House before it can come into effect on April 1, the start of India's financial year.

An Interim Budget is not the same as a 'Vote on Account'. While a 'Vote on Account' deals only with the expenditure
side of the government's budget, an Interim Budget is a complete set of accounts, including both expenditure and
receipts. An Interim Budget gives the complete financial statement, very similar to a full Budget. While the law does not
debar the Union government from introducing tax changes, normally during an election year, successive governments
have avoided making any major changes in income tax laws during an Interim Budget.
Former Finance Minister Morarji Desai presented the budget ten times, the most by any.
The Union Budget of India for 20122013 was presented by Pranab Mukherjee, the Finance Minister of India on 16
March 2012, this was the 7th budget of his career. These budgetary proposals would be applicable from financial year 1
April 2012 to 31 March 2013.
The Union Budget of India for 20132014 was presented by P. Chidambaram on 28 February 2013. The Interim Union
Budget for 20142015 was presented on February 17, 2014.
The Union Budget of India for 20142015 was presented by Arun Jaitley on 10 July 2014
Pre-liberalisation
The first Union budget of independent India was presented by R. K. Shanmukham Chetty on November 26, 1947.
The Union budgets for the fiscal years 1959-61 to 1963-64, inclusive of the interim budget for 1962-63, were presented
by Morarji Desai. On February 29 in 1964 and 1968, he became the only finance minister to present the Union budget
on his birthday. Vyas presented budgets that included five annual budgets, an interim budget during his first stint and
one interim budget and three final budgets in his second tenure when he was both the Finance Minister and Deputy
Prime Minister of India.
After desai's resignation, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become
the only woman to hold the post of the finance minister.
Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio, presented the annual budgets for 1982-
83, 198384 and 1984-85.
Rajiv Gandhi presented the budget for 1987-89 after V P Singh quit his government, and in the process became only the
third Prime Minister to present a budget after his mother and grandfather.
N. D. Tiwary presented the budget for 1988-89, S B Chavan for 1989-90, while Madhu Dandawate presented the Union
budget for 1990-91.
Dr. Manmohan Singh became the Finance Minister but presented the interim budget for 1991-92 as elections were
forced.
Due to political developments, early elections were held in May 1991 following which the Indian National Congress
returned to political power and Manmohan Singh, the Finance Minister, presented the budget for 1991-92.
Post-liberalisation
Manmohan Singh, in his next annual budgets from 199293, opened the economy, encouraged foreign investments and
reduced peak import duty from 300 plus percent to 50 percent.
After elections in 1996, a non-Congress ministry assumed office. Hence the final budget for 1996-97 was presented by
P. Chidambaram, who then belonged to Tamil Maanila Congress.
Following a constitutional crisis when the I. K. Gujral Ministry was on its way out, a special session of Parliament was
convened just to pass Chidambaram's 1997-98 budget. This budget was passed without a debate.
After the general elections in March 1998 that led to the Bharatiya Janata Party forming the Central Government,
Yashwant Sinha, the then Finance Minister in this government, presented the interim and final budgets for 1998-99.
After general elections in 1999, Sinha again became the finance minister and presented four annual budgets from 1999-
2000 to 2002-2003. Due to elections in May 2004, an interim budget was presented by Jaswant Singh.
Time of Budget Announcement
Until the year 2000, the Union Budget was announced at 5:00 pm on the last working day of the month of February.
This practice was inherited from the Colonial Era, when the British Parliament would pass the budget in the noon
followed by India in the evening of the day.It was Mr.Yashwant Sinha, the then Finance Minister of India in the NDA
government (led by BJP) of Atal Bihari Vajpayee, who changed the ritual by announcing the 2014 Union Budget at 11
am.

Brief on Union Budget 2014
1. Expenditure management commission has formed to oversee the management of expenses during the period.
2. 49% FDI in Defence.
3. Proposal for direct shareholding in banks by Indian citizen
4. Proposed to relief in Direct Investment
5. Proposal of 1000 cr. For Irrigation
6. Proposal of 14000 cr. For Prime Minister Road Planning
7. Proposal for developing 4 New AIIMS and contributing 400 cr. For it
8. Limit of EPF increase to 15000
9. Proposal for Uniform KYC scheme
10. Proposal for Single DEMAT account scheme for all type of Investments
11. Limit for PPF scheme increase from Rs.1 Lakh to Rs.1.5 Lakhs
12. Proposal of 200 cr. For the improvement of electricity in Delhi
13. No change in Tax Rates except tax slabs
14. Tax exemption increase from 2 Lakhs to 2.5 Lakhs
15.Tax exemption increase from 2.5 Lakhs to 3 Lakhs for senior citizen
16. Exemption of 80C has increased from Rs.1 Lakh to Rs.1.5 Lakhs
17. Increase in limit of 24(b) on interest on home loan on self occupied property has increased from 1.5 Lakhs to 2
Lakhs.
18. Portfolio income of FIIs to be treated as capital gain
19. 15% allowance for 3 yearson investment in P&M of more than 25 cr. For manufacturing companies
20. 10 year tax holiday for power companies starting production and distribution on or before March 31, 2017.
21. Removal of dividend distribution tax in Mutual fund companies
22. BCD has decreased on chemicals and petroleums to encourage investment
23. BCD has decreased from 10% to NIL in LED, LCD below 19 inches
24. BCD and SAD has decreased on spare parts and machineries used for Windmill Project
25. Excise duty has reduced from 10% to 6% on food processing machinery for fruits & vegetables
26. Excise duty on footwear has reduced from 12% to 6% and also will aplicable on Rs 1000 or more marling shoes
27. Custom duty reduced on certain type of coals
28. Import duty on steel increased from 5% to 7.5%
29. Inputs used for manufacture of personal computers exempted from 4 per cent customs duty.
30. Basic customs duty on basic flat stainless steel products raised to protect domestic industry to 7.5 per cent from
5 per cent 31.Clean energy cess (CEC) increased from Rs 50 per tonne to Rs 100 per tonne 32. Cigarettes and other
tobacco products become costlier due to higher excise duty( range to 11 to 72 %). 33. Medicines will become
cheaper 34. Fees will reduce on smart cards 35. Sugar carbonated drinks to get dearer ( additional excise duty
levied of 5%). 36. Basic rates of custom duty@ 10%, excise duty@12% and service tax @12% remains intact. 37.
Finance Minister Proposes liberalization of American Depository Receipt (ADR)/Global Depository Receipt (GDR)
regime. 38. Accounting Standards for Banks and Insurance sector would be notified separately. 39. Concessional rate
of 5% on interest extended to all types of bonds 40. Imported electronics goods to cost more. A cess to be
introduced. Related to Service Tax Change applicable with immediate effect i.e. from 11th July, 2014 onwards
Amendments related to Mega Exemption Notification Service Tax made applicable on Air-conditioned Contract
Carriages (benefit of abatement is allowed and service tax is payable on 40% of the value of service); Service Tax
made applicable on Clinical Research Organization; Service Tax made applicable on other services such as
consultancy, designing, etc. in relation to any activity in relation to any function ordinarily entrusted to a
municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum
improvement and upgradation to Government, a local authority or a governmental authority; Exemption on
services of treatment or disposal of bio-medical waste to a clinical establishment; Exemption on Services received
by educational institutions made more clarificatory by introducing exhaustive list which is as follows: 1.
transportation of students, faculty and staff of educational institution, 2. Catering services including any mid-day
meal scheme sponsored by government, 3. Security or cleaning or house-keeping services in such educational
institution, 4. Services relating to admission to such institution or conduct of examination. Exemption on Services
provided by an educational institution to its students, faculty and staff for eg. Transportation facility, Air
conditioned Canteen, Health Services etc. provided to students, faculty and staff; No Service Tax on Dharamshala,
ashrams etc. No Service Tax on Indian tour operators in cases where they organize tours for a foreign tourist wholly
outside India; Services by way of loading, unloading, packing, storage or warehousing, transport by vessel, rail or
road (GTA), of organic manure, cotton, ginned or baled, made exempted; Services by way of transport by vessel,
rail of organic manure made exempted. Amendments related to Reverse Charge Mechanism: Services provided by
Directors to Body corporates brought under reverse charge Services provided by recovery agents to Banks, Financial
Institution and NBFC brought under reverse charge If Rent a cab Service provider does not claim the benefit of
abatement scheme, service provider and service receiver both shall pay 50% of service tax each; In relation to GTA
Service the condition for availing abatement in case of GTA service is being amended to clarify that the condition
for non- availment of credit is required to be satisfied by the service providers only. Service recipient will not be
required to establish satisfaction of this condition by the service provider. Amendments related to SEZ
Service provided by sub-contractor to contractor who is further providing services (except Works Contract Service)
to SEZ unit or the developer, benefit of exemption shall not be allowed to the sub-contractor; Now service tax
shall not be charged by the service provider if the services are provided to SEZ unit or developer on the basis of
form A-1 but if form A-2 is not received within 3 months, service tax shall be paid by service provider; Provisions
with regard to claiming of exemption for SEZ units/ developers made more simplified by imposing time limits for
issuance of Form A-2 etc; There would be no requirement of furnishing service tax registration number of service
provider in case of full reverse charge Availability of CENVAT Credit: In case of service tax paid under full reverse
charge, the condition of payment of invoice value to the service provider for availing credit of input services is being
withdrawn. However, there is no change in respect of partial reverse charge. Re-credit of CENVAT credit reversed
on account of non-receipt of export proceeds within the specified period or extended period, to be allowed, if
export proceeds are received within one year from the period so specified or extended period. This can be done on
the basis of documents evidencing receipt of export proceeds (Refer the newly inserted proviso to rule 6(8)).
Changes applicable from 1st September, 2014 Manufacturer or a service provider shall take credit on inputs and
input services within a period of six months from the date of issue of invoice, bill or challan. Currently, CENVAT
Credit can be claimed at any time after receipt of invoice. Changes applicable from 1st October, 2014 Hike in
interest rates from 18% to 24% & 30% in case of delay in payment beyond six months and one year respectively. E-
payment of service tax made mandatory for every assessee; Changes in Place of Provision of Services Rules, 2012
such as conditions for determination of place of provision of repair service carried out on temporarily imported
goods is being omitted; The definition of intermediary is being amended to include the intermediary of goods in its
scope under Place of Provision of service rules; Point of taxation in respect of reverse charge will be the payment
date or the first day that occurs immediately after a period of three months from the date of invoice, whichever is
earlier, if the invoice has been issued on or after 1st October, 2014; Taxable portion in respect of transport of
goods by vessel is being reduced from 50% to 40%; Rule 2A of the Service Tax (Determination of Value) Rules, 2006,
category B and C of works contracts are proposed to be merged into one single category, with percentage
of service portion as 70%; Now, CENVAT credit of input service of renting of motorcab is allowed to a Rent a Cab
Service provider taking the benefit of abatement scheme of the following amount: Full CENVAT credit of such input
service received from a person who is paying service tax on forty percent of the value; or Up to forty percent
CENVAT credit of such input service received from a person who is paying service tax on full value. Now, CENVAT
credit of input service of a tour operator is allowed to a Tour operator service provider taking the benefit of
abatement scheme. Service consisting of hiring of Vessels (excluding yachts) and Aircraft is being excluded from
rule 9(d). Accordingly, hiring of vessels, or aircraft, irrespective of whether short term or long term, will be covered
by the general rule, that is, the place of location of the service receiver. Hiring of yachts would however continue to
be covered by rule 9 (d). Changes applicable by way of notification after Finance bill gets assent from the
president Scope of taxability on sale of space for advertisement in broadcast media, namely radio or television is
proposed to be extended to cover such sales on other segments like online and mobile advertising, advertisements in
internet websites, out-of-home media, on film screen in theatres, bill boards, conveyances, buildings, cell phones,
Automated Teller Machines, tickets, commercial publications, aerial advertising, etc. Service tax is proposed to be
levied on services provided by radio taxis or radio cabs, whether or not air-conditioned. The abatement presently
available to rent-a-cab service would also be made available to radio taxi service, to bring them on par. Changes
applicable from the date of bill gets assent from president Section 73 is being amended by way of insertion of new
sub-section (4A) to prescribe time limit of six months and one year respectively for completion of adjudication for
notice issued under sub-section (1) of section 73 and proviso to sub-section (1) and proviso to sub-section (4A).
Others Concerns by FM are : 1. All future indirect transfers under the retro tax regime will be scrutinised by a high
level committee of CBDT before action is taken. 2 .Govt to set up a high-level Committee to interact with industry
to bring about changes in tax laws if required 3 .Proposes to enhance the scope of income tax settlement
commission 4 .Govt proposes to strengthen authority for advance ruling in tax, set up more benches 5.
Manufacturing units will be allowed to sell their products through retail and e-commerce 6 .Bank capital to be
raised through retail sale of shares; Govt to continue to hold majority in PSU banks 7 .Govt approves minimum
monthly pension of Rs 1,000 per month under EPS-95 scheme run by EPFO 8. Rs 10,000 crore venture capital fund
to be set up for MSME sector 9. Definition of MSME to be revised for high capital ceiling 10. Govt announces
pruning of negative and exemption list of service tax to widen tax base.