Union Budget 2016 will be presented byArun Jaitley on Feb 29. Here are few budget terms that could be used by the Finance Minister and are simplified for the layman.
Direct tax is a tax levied on a taxpayer and paid directly to the government. Direct tax is one that cannot be shifted by the taxpayer to someone else. Income tax is a kind of direct tax which is imposed directly on the payer.
An indirect tax is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax such as the customer.For example, service tax.
Current account deficit
When the country's import's of goods, services and transfers is greater than the country's total export of goods, services and transfers, it leads to a current account deficit.
When the government's expenditure is over and above its income it results in a fiscal deficit. The government's revenues comprises of taxes, duties, levies, sale of stake in public sector units, sale of telecom spectrum etc.
When the government pays in part for a product that is consumed by an individual it means that a product is subsidised. For example, in India a part of the Fertlizer cost is borne by the government to help the poor farmer. Similarly, for Kerosene.
Value added tax
Value added Tax is a tax paid to the government (mostly state government). VAT is like a sales tax which is taxed on the purchase price which consumer has to bear.
The Finance Bill is a Bill that is introduced every year to allow the Government of India to make financial proposals for the next following financial year and includes a Bill to give effect to supplementary financial proposals for any period.
Gross Domestic Product means the value of all goods and services produced in the country in a particular year. It is also commonly called economic growth rates. To know more click here.
Securities Transaction Tax (STT) is a tax applied on purchase and sale of equity, derivatives and mutual funds. Click to know more about STT.
Minimum alternate tax (MAT)
This is for companies who report profits but pay no tax. Such cos have to pay a certain minimum tax on their book profits.
Capital Budget comprises of loans & advances that are granted to Union & State territory by the Union government. It also keeps track of the government's capital receipts and payments.
Revenue Budget refers to the excess of revenue expenditure over revenue receipts.
Primary Deficit is the difference between fiscal deficit and interest payments.
Goods and Services tax:
A GST (Goods and Services Tax) contains the entire element of tax borne by a good / service including a Central and a state-level tax.
It is an estimate of Fiscal Deficit and Revenue Deficit for the year. These are the estimates of expenditure by the government for a year.