Budget & Taxation

Economy · 6 min read · Sunitha Rao

Union Budget, deficits and the tax structure.

The Union Budget, presented by the Finance Minister under Article 112 as the annual financial statement, has a revenue account and a capital account. The financial year runs from 1 April to 31 March.

Fiscal deficit is the gap between total expenditure and total receipts excluding borrowings; revenue deficit is the shortfall on the revenue account alone. Primary deficit is fiscal deficit minus interest payments.

Taxes are direct - income tax and corporation tax - or indirect. GST, introduced on 1 July 2017, replaced a long list of indirect taxes and is administered through the GST Council.

Important points

  • The Union Budget is presented under Article 112.
  • Fiscal deficit = total expenditure - total receipts excluding borrowings.
  • Income tax is a direct tax; GST is indirect.
  • GST was introduced on 1 July 2017.

Examples

  1. If expenditure is 40 lakh crore and non-borrowed receipts 30 lakh crore, the fiscal deficit is 10 lakh crore.

Practise Budget & Taxation questions →