Finance Minister Nirmala Sitharaman
The Modi government is already preparing to present the first full budget of its third term. Finance Minister Nirmala Sitharaman will meet the country’s economists in this regard. The meeting held on June 20 discussed how to provide relief to the middle class. The country’s experts also presented their opinion to the government on granting relief on direct taxes. The government will announce the budget presentation date soon. Let us know about this Union Budget of the government, along with this we will also understand the mathematics of budget estimates and surcharges.
What is the Union budget?
In simple words, the Union Budget, also known as Annual Financial Statement under Article 112 of the Constitution of India, is an estimate of income and expenditure for a fixed period. Since the Union Budget of India is always prepared on February 1, it also provides budget estimates for the next financial year. When Lok Sabha elections are held every five years, the Union Budget is presented in the month of July after the formation of the new government. Let us tell you that the word ‘Budget’ is derived from the English word ‘Bowgette’, which has its origin from the French word ‘Bougette’. The word ‘Bougette’ comes from the word ‘Bouge’ which means leather bag.
What does divestment mean?
In recent years, this word has become essential in budget speech. Every year, the government sets a target of disinvestment as a major source of its revenue. This is called Divestment. This simply means that whenever the government sells part or all of its stake in any company, it will be called disinvestment.
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This is the math of the surcharge.
The surcharge or additional fee is an additional charge imposed on taxes. It is computed on the tax payable and not on the main income. A 10 percent surcharge on the existing 30 percent tax rate effectively increases the total tax rate to 33 percent. Understand this with an example: If 30 per cent tax is levied on an income of Rs 100, then the total tax payable will be Rs 30. Then, the amount of surcharge at the rate of 10 per cent on Rs 30 will be Rs 3. That means the tax amount payable after surcharge will be Rs 30 + Rs 3 = Rs 33.
What is the role of budget estimates?
During the budget speech, you will hear the word Budget Estimates over and over again. In its budget, the government allocates a certain amount to each ministry, department or scheme for the next financial year. This is the estimated expenditure of that ministry or department, which in English is called Budget Estimates.
