Highlights of the Union Budget 2016-17

INFALTION

  • CPI inflation came down to 5.4% under the BJP govt.
  • Fall in CPI inflation providing big relief to public.

Benefits for People

  • A Great Boost for startups! 100% tax deductions for new startups for first 3 years.
  • Presumptive income tax scheme to be extended to all professionals with income of Rs 50 lakh with presumption of 50% profit.
  • All Services provided by EPFO exempted from service tax.
  • Ceiling of tax rebate for tax payers with up to Rs 5 Lakh annual income to be raised to Rs 5,000 from Rs 2,000.
  • Monetary limit for cases to be decided by 1-member bench up from 15 Lakh to 50 Lakh rupees
  • Amnesty scheme from June 2016 to Sept 2016 Tax+intt+penalty@45%
  • All Service tax exempted for housing construction of houses less than 60 square metre.
  • Deduction for rent payers raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses (sec 80GG)
  • Make in India –Suitable changes to be made in customs & excise duty rates to improve competitiveness and boost Make in India.
  • INR 3,000 additional tax rebate for income >5 Lacs
  • 3 years (out of 5) tax holiday for startups starting between April 16 to March 19, as applicable.

Burden on People

  • No changes in income tax slabs.
  • To up excise duty on various tobacco products by 10-15%.
  • Cos incorporated post Mar 1 to be taxed at 25%+ surcharge.
  • To up excise duty on some tobacco pdts by 10-15%
  • Infra cess of 2% on diesel cars.
  • 4% infra cess on high capacity vehicles, SUVs.
  • To levy 1% infra cess on small petrol, LPG, CNG cars.
  • 10% extra DDT on dividend recipients earning above Rs 10 Lakh per annum, says FM in Budget 2016.
  • Individual/HUF income above 1 crore, surcharge increased from 10% to 15%.
  • For new only property <50 Lacs vale, loan < 35Lacs additional interest rebate 50K.
  • Krishi Kalyan Cess of 0.5% on all taxable services.
  • Penalty to be 50% of tax in income under-reporting cases, 200% in misreporting of facts.
  • Clean energy cess increased from Rs. 200/ton to 400/ton on coal, lignite and peat.
  • Kisan vikas cess @0.50% from June 2016 on service tax, effective service tax rate @15%
  •  10% tax on all receipts for >10Lacs dividend receipts.
  • The FM has increased STT for options increased from 0.0017 to 0.005
  • Presumptive taxation @8% for turnover upto 2 crore, @50% for professional receipts upto 50 Lacs.
  • Corporate tax rate  – 1% for < 5 crore turnover.
  • Excise of 12.5% with input tax credit on jewellery.

 

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