Budget relief for small-time tax payers, I-T halved

By Agencies On Feb 2, 2017

Ban on cash transactions above Rs 3 lakh; Railways allocated Rs 1.3 lakh crore

Finance Minister Arun Jaitley stands outside the North Block with the briefcase containing the Budget before its presentation in Parliament on Wednesday. (PTI)

New Delhi: In a pre-poll Budget aimed at softening the demonetisation blow, Finance Minister Arun Jaitley on Wednesday halved the basic income tax rate to 5 per cent and lowered rate for small companies while boosting spending on rural employment, agriculture and infrastructure.
Creating history, the Minister presented a merged railway and general Budget after advancing the dates by a month that provides a record outlay of Rs 3,96,135 crore for infrastructure schemes besides a capital expenditure of Rs 1.3 lakh crore on railways and Rs 64,000 crore on highways.
The Budget seeks to provide a record Rs 10 lakh crore in loans to farmers, boost funds for rural employment guarantee programme, bring one crore households out of poverty and promised to build one crore houses by 2019 for the homeless ahead of the crucial elections in five states including Uttar Pradesh and Punjab.
Mobile phones will be costlier with the Budget proposing a 2 per cent special auxiliary duty on import of PCBs.
While the income tax rate for income between Rs 2.5 lakh and Rs 5 lakh has been lowered to 5 per cent, a 10 per cent surcharge has been slapped on income between Rs 50 lakh and Rs 1 crore. The 15 per cent surcharge on income above Rs 1 crore will continue.
While the surcharge alone would net Rs 2,700 crore a year, his give away on direct tax proposals will result in a loss of Rs 15,500 crore.
Against the backdrop of demonetisation intended to eliminate black money and introduce clean transactions, the Budget barred any transaction in cash above Rs 3 lakh. As a measure of transparency in political funding, he lowered to one-tenth the donation that political parties can accept in cash to Rs 2,000 per donor.
Also bearer Electoral Bonds will be introduced which a donor can buy from a scheduled bank through cheque or e-mode, for making donations.
Further, political parties will have to file their returns in time limit prescribed in the Income Tax Act.
Cash transaction of above Rs 3 lakh will not to be permitted and penalty of equal amount paid would be levied in case of breach. (PTI)