|Indian Financial budget for 2016-17
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
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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:
- Govt. will pay EPF contribution of 8.33% for all new Employees for first three years.
- Rebate U/s 87A increased to Rs 5000 for tax payers earning less than Rs 5 lakhs.
- Deduction u/s 80GG for rent paid raised to Rs 60000 per annum from existing Rs 24000.
- Turnover for presumptive taxation increased to 2 crores.
- Presumptive taxation schemes introduced for all Professionals with receipts up to Rs 50 lakhs.
- Additional exemption upto Rs 50000 for housing loans upto Rs 35 lakhs, provided the cost of the house is not above Rs 50 Lakhs.
- Surcharge increased from 12% to 15% on income above 1 crore for other than Companies/Firms/Cooperative Societies.
- Tax @ 10% on dividend in excess of Rs 10 Lakhs to be payable by recipients
- Advance Tax payment schedules for Assessees other than Companies changed in line with existing payment schedules for Companies.
- Assessee opting for computation on presumptive basis shall be required to pay Advance Tax in one installment on or before 15th March.
- 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.
- 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
- Capital gains exemption proposed for investments in start ups.
- No higher withholding tax if non-resident does not have PAN but furnishes an alternative document
- 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.
- Provision for tax compliance for undisclosed income, taxed @ 30% + surcharge 7.5% + penalty 7.5% and immunity from prosecution on such declarations.
- Sec. 80JJAA deduction extended from only manufacturing units to all assessees who are subject to tax audit.
- Service tax exempted on housing construction of houses less than 60 Sqare Meter.
- Krishi Kalyan Cess @ 0.5% on all taxable services.
- Services provided by EPFO exempted from service tax.
- Excise duty increased on tobacco products from 10% to 15%
- 1% tax on purchase of luxury cars over Rs 10 Lakhs, and in cash purchase of goods and services over Rs 2 lakhs.
- 1% of Excise duty imposed on articles of Jewelry, excluding silver.
- 100 per cent FDI allowed in marketing of food products produced and marketed in India.
- Companies Act proposed to be amended. Registration of companies should be given in one day.
- 60% of the Corpus to be taxed on withdrawal from National Pension Scheme and Recognized Provident Fund
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