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Budget 2016: Who's gained, who's lost

Infra turns out to be a winner, startups to get a boost

Published: Feb 29, 2016 02:38:45 PM IST
Updated: Feb 29, 2016 06:46:20 PM IST
Budget 2016: Who's gained, who's lost

Finance Minister Arun Jaitley presented the Union Budget in Parliament today. Here are the sectors that got impacted by Budget 2016:

• Infrastructure sector  gains a lot considering the specific impetus of the govt. to promote rural infrastructure, roadway set ups, railway infrastructure development and opening up of road transport to private participation and development of ports.

• Financial Services sector benefits as the budget throws more focus by providing tax benefits for setting up of International Financial Centres, roll out of ATMS & Micro ATMS, more thrust on recapitalisation of banks.

• Food Manufacturing & Processing - 100% FDI will be allowed through FIPB route in marketing of food products produced and manufactured in India. This will benefit farmers, give impetus to food processing industry and create vast employment opportunities.

• New manufacturing Companies set up after 01 March 2016 proposed to be given an option to be taxed at 25% + surcharge and cess provided they do not claim any tax break. Also, corporate income tax rate lowered to 29% for relatively small enterprises where turnover does not exceed Rs. 50 Million.

• Benefits for startups
set up during April 2016 to March 2019, corporate tax break has been offered for 3 out of 5 years while Minimum Alternate Tax shall continue to apply. In order to promote / encourage investments, Government has also notified investment in start ups as eligible for availing capital gains exemption.

• 100% FDI in Asset Reconstruction Companies (ARCs) will be permitted through automatic route. Foreign Portfolio Investors (FPIs) will be allowed up to 100% of each tranche in securities receipts issued by ARCs subject to sectoral caps.

• Real Estate Investment Trusts (REIT) - To promote housing activity, facilitation of investments in Real Estate Investment Trusts is important. Therefore, the finance minister has announced that any distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax. Rationalisation of the capital gains regime for the sponsors exiting at the time of listing of the units of REITs and InvITs, subject to payment of Securities Transaction Tax (STT). The rental income of REITs from their own assets will have pass through facility.

- By Aravind S, partner, PwC India and Krishnakumar S, manager, PwC India. The views expressed are their own.

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