Developed By: iNFOTYKE
Jaitley focuses on agri, social sectors l Spares Aam Aadmi of additional taxes l PM lauds proposals
New Delhi: Marginal tax relief of upto Rs 6,600 for small tax payers, a 3 per cent hike in surcharge on super-rich, new levies on cars and SUVs and a compliance window to domestic black money holders were unveiled in the Budget for 2016-17 that envisages a huge spending of Rs 1.77 lakh crore in rural areas to address the agrarian distress.
Presenting his third Budget, Finance Minister Arun Jaitley made no changes in the personal or corporate income- tax slabs but made costlier several items including electricity, jewellery, readymade garments, mineral water and aerated drinks, tobacco and cigarettes by raising duties.
The Budget brought in a new 0.5 per cent Krishi Kalyan Cess on all taxable services to fund agriculture while proposing a retirement tax on 60 per cent of the pension and provident fund corpus including EPF created after April 1, 2016.
Against expectations of incentives for industry hit by global slowdown and shrinking exports, the Budget did not offer anything major.
While deciding to stick to to fiscal deficit roadmap, he unveiled a new policy for sale of PSUs to raise additional resources.
While the revenue loss on direct taxes will be Rs 1060 crore, his indirect tax proposal will mobilise an additional Rs 20,670 crore. Net revenue gain will be Rs 19,610 crore.
Asked about comments that the Budget was left-of-centre, Jaitley said, “it is neither left nor right but deals with the reality of Indian economy. It addresses sectors which need highest priority and rural areas need most attention.”
Ahead of Assembly elections in five states, Jaitley focused on plans for agriculture and farmers welfare by providing Rs 35,984 crore on this alone. A massive Rs 87,765 crore has been allocated for rural sector while Rs 2000 crore will be provided for giving concessional LPG connections to BPL families.
As much as Rs 2.87 lakh crore will be given as grants in aid to panchayats and municipalities while allocation for social sector including education and healthcare has been pegged at Rs 1.51 lakh crore.
A total outlay of Rs 2.21 lakh crore has been made for infrastructure, of which Rs 97,000 crore will be in the road sector including on rural roads.
In a bid to shore up the economy hit by global slowdown, the Budget proposes a 15.3 per cent higher expenditure at Rs 19.78 lakh crore in 2016-17, consisting of Rs 5.50 lakh crore under Plan and Rs 14.28 lakh crore under non-Plan.
The Budget provides an outlay of Rs 162,759 crore for defence in 2016-17, up by 13 per cent from Rs 143,236 crore in the revised estimates for the current year. Capital expenditure on defence has been put at Rs 86,340 crore against Rs 81,400 crore in the current year’s revised estimates.
Interest payment will account of Rs 492,670 crore against Rs 442,620 crore. Subsidies will marginally lower at Rs 250,433 crore as opposed to Rs 257,801 crore in the revised estimates.
In relief to small tax payers, the Budget proposes to raise the ceiling of tax rebate under Section 87(A) from Rs 2000 to Rs 5000 for incomes not exceeding Rs 5 lakh per annum. There are two crore tax payers in this category who would get a relief of Rs 3000 in their tax liability.
Those who do not have house of their own and do not get house rent allowance from employers will get a deduction of Rs 60,000 per year as against existing Rs 24,000.
First time home buyers will get a deduction of an additional interest of Rs 50,000 per annum for loan upto Rs 35 lakh, during 2016-17, provided the house value does not exceed Rs 50 lakh.
The Budget proposes to extend the presumptive taxation scheme to professionals with gross receipt up to Rs 50 lakh with the presumption of profit being half of the gross receipt.
After pursuing blackmoney abroad, Jaitley today offered a limited period compliance window for domestic holders of unaccounted income and assets to declared their undisclosed income and assets and clear past transgressions by paying tax at 30 per cent plus 7.5 per cent penalty and 7.5 per cent of interest, a total of 45 per cent.
For the foreign blackmoney holders, the total tax and penalty was 60 per cent for those came clean.
In the domestic scheme, the Minister declared that there will be no scrutiny or inquiry regarding income tax declared under the scheme under I-T and Wealth Tax Act and they will have immunity from prosecution.
Immunity from benami transaction act of 1998 is also proposed subject to certain conditions.
The 7.5 per cent surcharge will be called Krishi Kalyan Surcharge to be used for agriculture and rural economy.
“We plan to open the window under this Income Disclosure Scheme from June 1 to September 30, 2016 with an option to pay amount due within two months of declaration,” he said.
A Krishi Kalyan Cess of 0.5 per cent would cover all services, proceeds of which will be used for financing incentives for improvement of agriculture and welfare of farmers. The cess will come into effect from June 1.
Referring to concerns over pollution and traffic situation in cities, Jaitley proposed to levy an infrastructure cess of 1 per cent on small petrol, LPG, CNG cars, 2.5 per cent on diesel cars of certain capacity and 4 per cent on higher engine capacity vehicles and SUVs. (PTI)