Union Budget - Current Affairs Questions and Answers

ANSWER: Department of Investment and Public Asset Management

Explanation:

• The Department of Disinvestment is being renamed as the “Department of Investment and Public Asset Management (DIPAM)”.
• A new policy for management of Government investment in Public Sector Enterprises, including disinvestment and strategic sale, has been approved.
• Government will leverage the assets of CPSEs for generation of resources for investment in new projects. Government will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their asset value for making investment in new projects.
• The NITI Aayog will identify the CPSEs for strategic sale.

ANSWER: Only 1

Explanation:

• Severe illnesses push lakhs of households below the poverty line every year.
• New health protection scheme will provide health cover up to Rs. One lakh per family.
• For senior citizens an additional top-up package up to Rs. 30,000 will be provided.

ANSWER: Both 1 and 2

Explanation:

• The FY’17 Budget has also proposed to hike the investment limit for foreign entities in Indian stock exchanges from five per cent to 15 per cent on par with domestic institutions.
• This move is aimed at enhancing global competitiveness of Indian stock exchanges and accelerating adoption of best-in-class technology and global market practices, the government said.
• Also, the existing 24 per cent limit for investment by foreign portfolio investors (FPI) in CPSEs other than banks, listed in stock exchanges, will be increased to 49 per cent.
• The move is to obviate the need for prior approval of government for increasing the FPI investment.

ANSWER: Neither 1 nor 2

Explanation:

• The government announced the policy of 100% FDI in marketing of food products produced and manufactured in India.
• This will provide impetus to the foreign investment in food processing sector, benefit farmers immensely and will create vast employment opportunities. This will help farmers get remunerative prices for their produce, transfer of technology and modern agricultural practices required for producing agricultural produce on a large scale to meet the requirements of organized marketing.
• The entry of FDI in food marketing will incentivize farmers to adopt correct agricultural practices and make internationally acceptable products. It will also address issue of crop wastage.
• Foreign investment will be allowed in the insurance and pension sectors in the automatic route up to 49% subject to the extant guidelines on Indian management and control to be verified by the Regulators.
• In the FY’15 Budget, the government had increased the composite cap (including FDI and foreign institutional investment) in the insurance sector (and automatically in the pension sector as well) to 49 per cent from the 26 per cent but with full Indian management and control and through the government approval (through Foreign Investment Promotion Board or FIPB) route.
• Investors had delayed new investments in the sectors citing ambiguity regarding the rider specifying that management and control should be in Indian hands.

ANSWER: Neither 1 nor 2

Explanation:

• The government proposes to start ‘National Dialysis Services Programme’.
• Funds will be made available through PPP mode under the National Health Mission, to provide dialysis services in all district hospitals.
• To reduce the cost, government will exempt certain parts of dialysis equipment from basic customs duty, excise/CVD and SAD.
• The government had last year imposed a heavier levy on consumables used in dialysis, spiking the procedure rates by 17 to 20 per cent.
• But the tax exemption announced in the budget applies only to dialysis equipment and not consumables.

ANSWER: 1, 3

Explanation:

• Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of Rs. 10 lakh per annum.
• Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above RS. 1 crore.
• Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of Rs. ten lakh and purchase of goods and services in cash exceeding Rs. two lakh.
• These fall under additional resource mobilization for agriculture, rural economy and clean environment

ANSWER: Those already under scrutiny

Explanation:

• Tax payers, whose returns were picked for random scrutiny by the authorities in recent years, would not be eligible to turn concealed income into ‘white’ under the Income Declaration Scheme (IDS), announced in the Union Budget to bring black money into the tax net.
• The scheme also shuts out ‘innocent’ taxpayers who filed returns on time but whose cases were chosen for scrutiny to verify claims.
• This could be a dampener for the scheme as it would exclude potential disclosures from people who received notices seeking a regular explanation on the returns they had filed.
• Under the income declaration scheme, people who have received notices under Sections 142 (1), 143 (2), 148, 153A or 153C of the Income Tax Act are not eligible to disclose previously concealed income.
• Separately, as per the explanatory memorandum to the budget, it won’t be open to cases “where a search or survey has been conducted and the time for issuance of notice under the relevant provisions of the Act has not expired, or where information is received under an agreement with foreign countries regarding such income, cases covered under the Black Money Act, 2015, or persons notified under Special Court Act, 1992, or cases covered under Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, and the Prevention of Corruption Act, 1988.

ANSWER: Undisclosed Income

Explanation:

• Domestic tax payers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income.
• There will be no scrutiny or enquiry regarding income declared in these declarations under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution. Immunity from Benami Transaction (Prohibition) Act, 1988 is also proposed subject to certain conditions.
• Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan Surcharge to be used for agriculture and rural economy.
• The compliance window is of 4 months. From 1st June 2016 to 30th September 2016.

ANSWER: 1, 3

Explanation:

• Government proposes to levy an infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs.
• The Cess will be primarily used for funding pollution reduction and improve the traffic situation in the Indian cities.
• Krishi Kalyan Cess, @ 0.5% will be levied on all taxable services, proceeds would be exclusively used for financing initiatives for improvement of agriculture and welfare of farmers
• Clean Environment Cess is nothing but Clean Energy Cess which was there already. It was just renamed and not newly introduced.

ANSWER: Senior most Lok Sabha MP from District

Explanation:

• District Level Committees under Chairmanship of senior most Lok Sabha MP from the district for monitoring and implementation of designated Central Sector and Centrally Sponsored Schemes.
• Priority allocation from Centrally Sponsored Schemes to be made to reward villages that have become free from open defecation.