'Union Budget'

Definition:

According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year.

Description:

Union Budget keeps the account of the government's finances for the fiscal year that runs from 1st April to 31st March. Union Budget is classified into Revenue Budget and Capital Budget.

Revenue budget includes the government's revenue receipts and expenditure. There are two kinds of revenue receipts - tax and non-tax revenue. Revenue expenditure is the expenditure incurred on day to day functioning of the government and on various services offered to citizens. If revenue expenditure exceeds revenue receipts, the government incurs a revenue deficit.

Capital Budget includes capital receipts and payments of the government. Loans from public, foreign governments and RBI form a major part of the government's capital receipts. Capital expenditure is the expenditure on development of machinery, equipment, building, health facilities, education etc. Fiscal deficit is incurred when the government's total expenditure exceeds its total revenue.

What is 'Annual Financial Statement'

Definition: Article 112 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year, from April 1 to March 31. This statement is called the annual financial statement.

Description: It is divided into three parts, Consolidated Fund, Contingency Fund and Public Account. For each of these funds, the government has to present a statement of receipts and expenditure.

What is 'Budgetary Deficit'

Definition: Budgetary deficit is the difference between all receipts and expenses in both revenue and capital account of the government.

Description: Budgetary deficit is the sum of revenue account deficit and capital account deficit. If revenue expenses of the government exceed revenue receipts, it results in revenue account deficit. Similarly, if the capital disbursements of the government exceed capital receipts, it leads to capital account deficit. Budgetary deficit is usually expressed as a percentage of GDP.

What is 'Bearish Trend'

Definition: 'Bearish Trend' in financial markets can be defined as a downward trend in the prices of an industry's stocks or the overall fall in broad market indices.

Description: Bearish trend is characterized by heavy investor pessimism about the declining market prices scenario. A fall in the prices of about 20% is identified as a bearish trend.

What is 'Budgetary Deficit'

Definition: Budgetary deficit is the difference between all receipts and expenses in both revenue and capital account of the government.

Description: Budgetary deficit is the sum of revenue account deficit and capital account deficit. If revenue expenses of the government exceed revenue receipts, it results in revenue account deficit. Similarly, if the capital disbursements of the government exceed capital receipts, it leads to capital account deficit. Budgetary deficit is usually expressed as a percentage of GDP.

What is 'Capital Budget'

Definition: Capital Budget consists of capital receipts and payments. It also incorporates transactions in the Public Account.

Description: Capital receipts are loans raised by the government from the public (which are called market loans), borrowings by the government from the Reserve Bank and other parties through sale of treasury bills, loans received from foreign bodies and governments, and recoveries of loans granted by the Central government to state and Union Territory governments and other parties.

Capital payments consist of capital expenditure on acquisition of assets like land, buildings, machinery, and equipment, as also investments in shares, loans and advances granted by the Central government to state and Union Territory governments, government companies, corporations and other parties.

What is 'Consolidated Fund'

Definition: Consolidated Fund of India is the most important of all government accounts. Revenues received by the government and expenses made by it, excluding the exceptional items, are part of the Consolidated Fund.

Description: This fund was constituted under Article 266 (1) of the Constitution of India. All revenues received by the government by way of direct taxes and indirect taxes, money borrowed and receipts from loans given by the government flow into the Consolidated Fund of India.

All government expenditure is made from this fund, except exceptional items which are met from the Contingency Fund or the Public Account. Importantly, no money can be withdrawn from this fund without the Parliament’s approval.

What is 'Corporation Tax'

Definition: Corporation tax is a tax imposed on the net income of the company.

Description: Companies, both private and public which are registered in India under the Companies Act 1956, are liable to pay corporate tax. For the assessment year 2014-15, domestic companies are taxed at the rate of 30%.

In addition to that, surcharge at the rate of 5% is levied if net income is in the range of Rs 1 crore to Rs 10 crore. If the net income exceeds Rs 10 cr, surcharge at the rate of 10% is levied. Education cess of 3% is levied on the sum of income tax and surcharge irrespective of the level of net income.

In the case of foreign companies, royalty or fees received by them in a predefined time-frame are subject to tax at the rate of 50%. Other income or the balance is taxed at the rate of 40%. Surcharge at the rate of 2% is levied if the net income is in the range of Rs 1 cr to Rs 10 cr. If the net income exceeds Rs 10 cr, the surcharge is increased to 5%.

Education cess of 3% is levied on the sum of income tax and surcharge irrespective of the level of net income. Marginal relief is given to both domestic and foreign companies in the case of net income exceeding Rs 1 cr and Rs 10 cr.