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Indian Financial budget for 2016-17
Indian Financial Budget 2009-10
Courtesy: India Budget

Honorable Finance Minister Mr. Arun Jaitley unveiled his third Union Budget for Fiscal Year 2016-17 today, forecasting the GDP growth by 7.6% with retaining Fiscal Deficit at 3.5% of GDP for the fiscal year. Citing that the CPI inflation has come down to 5.4% from 9% in the past 3 years, he said it is a huge relief to the public.

Relyon brings you the best and informative parts from the budget towards taxation. The due care has been taken while presenting the content over here

You can find these resources useful:

For More details visit www.indiabudget.nic.in

 

There is no change in Individual Income Tax slabs in the Union Budget, listing here the key highlights from Finance Bill 2016 with regard to Direct and Indirect Taxes:

  1. Govt. will pay EPF contribution of 8.33% for all new Employees for first three years.
  2. Rebate U/s 87A increased to Rs 5000 for tax payers earning less than Rs 5 lakhs.
  3. Deduction u/s 80GG for rent paid raised to Rs 60000 per annum from existing Rs 24000.
  4. Turnover for presumptive taxation increased to 2 crores.
  5. Presumptive taxation schemes introduced for all Professionals with receipts up to Rs 50 lakhs.
  6. Additional exemption upto Rs 50000 for housing loans upto Rs 35 lakhs, provided the cost of the house is not above Rs 50 Lakhs.
  7. Surcharge increased from 12% to 15% on income above 1 crore for other than Companies/Firms/Cooperative Societies.
  8. Tax @ 10% on dividend in excess of Rs 10 Lakhs to be payable by recipients
  9. Advance Tax payment schedules for Assessees other than Companies changed in line with existing payment schedules for Companies.
  10. Assessee opting for computation on presumptive basis shall be required to pay Advance Tax in one installment on or before 15th March.
  11. Corporate Tax :
    • New manufacturing companies established or/post 1st March 2016 proposed to be given an option to be taxed @ 25% plus surcharge and cess provided they do not claim any profit linked deductions and not claiming accelerated depreciation.
    • For small business with turnover less than Rs 5 Crore corporate tax reduced to 29% plus surcharge and cess.
  12. Start ups to get 100% tax exemption for 3 years. However MAT will be applicable for startups that qualify for 100 per cent tax exemption
  13. Capital gains exemption proposed for investments in start ups.
  14. No higher withholding tax if non-resident does not have PAN but furnishes an alternative document
  15. Finance Minister proposes to rationalize TDS provisions:
    • Threshold Limit Changes:
      • Section 192A increased from existing 30000 to 50000
      • Section 194BB increased from existing 5000 to 10000
      • Section 194C increased from existing 75000 to 100000 for aggregate transactions
      • Section 194D reduced from existing 20000 to 15000
      • Section 194G increased from 1000 to 15000
      • Section 194H increased from 5000 to 15000
      • Section 194LA increased from 200000 to 250000
    • Tax Rate changes:
      • Section 194DA decreased from 2% to 1%.
      • Section 194EE decreased from 20% to 10%
      • Section 194G decreased from 10% to 5%
      • Section 194H decreased from 10% to 5%
    • New section 194LBC introduced, in respect of investment in securitization trust taxable at 25% if payee is an Individual or HUF, and 30% for other payees.
  16. Provision for tax compliance for undisclosed income, taxed @ 30% + surcharge 7.5% + penalty 7.5% and immunity from prosecution on such declarations.
  17. Sec. 80JJAA deduction extended from only manufacturing units to all assessees who are subject to tax audit.
  18. Service tax exempted on housing construction of houses less than 60 Sqare Meter.
  19. Krishi Kalyan Cess @ 0.5% on all taxable services.
  20. Services provided by EPFO exempted from service tax.
  21. Excise duty increased on tobacco products from 10% to 15%
  22. 1% tax on purchase of luxury cars over Rs 10 Lakhs, and in cash purchase of goods and services over Rs 2 lakhs.
  23. 1% of Excise duty imposed on articles of Jewelry, excluding silver.
  24. 100 per cent FDI allowed in marketing of food products produced and marketed in India.
  25. Companies Act proposed to be amended. Registration of companies should be given in one day.
  26. 60% of the Corpus to be taxed on withdrawal from National Pension Scheme and Recognized Provident Fund

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