Budget 2016: Government to forego Rs 68,711 crore in incentives, exemptions in FY16

NEW DELHI: Government's revenue foregone in the form of incentives and tax exemptions including for corporates in the current fiscal is estimated to grow by 5.60 per cent to Rs 68,710.98 crore.

The revenue foregone stood at Rs 65,067.21 crore in the 2014-15 fiscal.

"Though the revenue impact has been quantified in terms of tax expenditure, it does not imply that this quantum of revenue has been waived by the government. Rather, these could be seen as targeted expenditure for the promotion of certain sectors," the Finance Ministry said in its Budget document today.

Revenue foregone on account of deduction of export profits of units located in SEZs (section 10A and 10AA) will be to the tune of Rs 17,619.22 crore in the current fiscal.

Companies take advantage of various concessions to reduce tax liability, while individuals park their funds in tax savings scheme to reduce tax burden.

Revenue foregone on deduction of profits of undertakings engaged in generation, transmission and distribution of power was to tune of Rs 10,159.80 crore in 2015-16 compared to Rs 9,621 crore in the last fiscal year, it said.

Similarly, revenue foregone on deductions of profit of industrial undertakings derived from production of mineral oil and natural gas stood at Rs 3,408.05 crore in the current fiscal.