Indian budget focuses on small tax payers, rural economy

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Indian budget focuses on small tax payers, rural economy
Indian Finance Minister Arun Jaitley, center, leaves for annual budget presentation at parliament in New Delhi, India.

New Delhi - Finance Minister Arun Jaitley began his speech saying that India was a bright spot in the global economy in these difficult times.

By Web Report

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Published: Mon 29 Feb 2016, 7:37 AM

Last updated: Tue 1 Mar 2016, 12:43 AM

Finance Minister Arun Jaitley on Monday gave relief to small tax payers, nudged the affluent to shell out more while focusing on the rural economy with much higher fiscal outlays, as he presented India's national budget for 2016-17 in the Lok Sabha.
He also said that people living in rented houses will be eligible for deductions of up to Rs.60,000 now -- up from Rs.24,000. He also said the ceiling of tax rebate for people with income up to Rs.500,000 per annum was being raised to Rs.5,000 from the present Rs.2,000.
Read India Budget 2016-17 Highlights
But for larger tax payers, he said, the income tax surcharge of 12 percent at present was being hiked to 15 percent for incomes exceeding Rs.1 crore per annum. Suitable changes, Jaitley said, will also be made in customs and excise duty rates to push the "Make in India" programme.

"Tax evasion will be countered strongly," he warned.
Jaitley also said that the fiscal deficit target of 3.9 perecent of GDP for the current fiscal will be met, even as the target for next year has been fixed at 3.5. "Prudence lies in adhering to fiscal targets," he said.
But in a major departure from the past, where government expenditure could be demarcated between productive and administrative expenses, the finance minister said the classigication of plan and non-plan will be done away with from 2017-18. 
 
FM Arun Jaitley and his team called on President Pranab Mukherjee this morning for the customary briefing on the Budget.
FM Jaitley and MoS Jayant Sinha reach Parliament 
Copies of Union Budget 2016 brought to Parliament

Budget Highlights 

  • To reduce multiplicity of taxes and cascading, 13 taxes with collections of less than Rs.50 crore a year abolished
  • Income tax department will expand e-sahyog to assist small taxpayers
  • Scope of e-assessment to be expanded to seven mega cities to simplify compliance for taxpayers
  • Taxation proposals to increase government revenue by Rs.19,610 crore
  • Penalty to be 50 percent of tax in income under-reporting cases, 200 per cent in misreporting of facts
  • Tax arrears can be paid in lieu of interest liabilities in retrospective taxation cases
  • Direct Benefit Transfer in fertilisers on pilot basis in few districts
  • Services provided by EPFO exempted from service tax
  • Limited tax compliance window from June 1 - September 30 for declaring undisclosed income at 45 per cent including surcharge and penalties
  • Clean energy cess increased from Rs.200/tonne to Rs.400/tonne on coal, lignite and peat
  • Moving towards a low tax regime with non-litigious approach
  • Committed to provide a stable and predictable taxation regime
  • Relief of Rs.3,000 per year to taxpayers with income below Rs.5 Lakh per year to benefit one crore taxpayers
  • Surcharge on income tax for incomes exceeding Rs.1 crore per annum raised from 12 per cent to 15 per cent
  • Service tax exempted for general insurance schemes under Niramayi Swasthya Bima Yojana
  • Suitable changes to be made in customs and excise duty rates to improve competitiveness and boost Make In India
  • Plan, Non-Plan distinction to be removed from 2017-18
  • For income below Rs.5 lakh per annum, tax ceiling has been raised from Rs.2,000 to Rs.5,000
  • Relief to those in rented houses: Deduction raised from Rs.24,000 to Rs.60,000 under Section 88G
  • Corporate income tax: Incentives for new manufacturing companies and relatively small enterprise companies
  • Fiscal deficit for 2016-17 targeted at 3.5 per cent
  • Committed to implementing General Anti-Avoidance Rules (GAAR) from April 1, 2017
  • New policy for managing assets of public enterprises
  • Comprehensive approach to be adopted for government investment in central public sector enterprises
  • Three initiatives for better delivery of public services
  • Increased allocation of Rs.1,80,000 crore under PM MUDRA Yojana
  • Market Stabilisation Fund for Pulses gets Rs.900 crore
  • RBI Act being amended to provide statutory basis for monetary policy framework
  • Financial Data Management Centre for integrated data collection and analysis
  • 100 per cent FDI to be allowed through FIPB route in food products produced and marketed in India
  • Department of Disinvestment to be renamed Department of Investment and Public Asset Management
  • Comprehensive plan being drawn up to be implemented in the next 15-20 years for exploiting nuclear energy
  • Government to provide health insurance of up to Rs.1 lakh per family; 300 generic drug stores to be opened under PM Jan Aushadhi Yojana
  • Roads and highways allocated Rs.55,000 crore, 50,000 km of state highways to be taken up for upgradaing to national highways
  • Stand Up India scheme allocated Rs.500 crore for SCs, STs women entrepreneurs
  • Government to incentivise gas production from deep sea and other unutilised deep sources
  • Public Utility Resolution of Disputes Bill for resolution of infra sector disputes
  • Pradhan Mantri Kaushal Vikas Yojan gets Rs.1,700 crore
  • Digital depository for school leaving certificates
  • Higher education financing agency to be set up with fund of Rs.1,000 crore
  • National Skill Development Mission has imparted training to 76 lakh youth; 1,500 multi-skill training institutes to be set up
  • Model Shops and Establishments Bill to be circulated for voluntary adoption by states
  • Current account deficit down to $14.4 billion 
  • In 2016-17: Rs.9 lakh crore
  • Animal welfare programme, animal health card, e-marketing platform for connecting breeders
  • 100 per cent village electrification to be achieved by May 1, 2018
  • Appreciation for 75 lakh middle class and lower middle class families for willingly giving up LPG Subsidy 
  • Five lakh acres to be brought under organic farming over three year period
  • MGNREGA to get Rs.38,500 crore
    Recapitalisation of banks during next fiscal
  • Prudent fiscal policy needed, domestic demand should be raised, reforms need to be carried out
  • Farm, rural sector, infra and social sector to get more funds
  • Need to prioritize expenditure given recommendations of 7th Pay Commission and OROP implementation
  • Nine pillars for reforming India, among them agriculture, social sector, education, infra, fiscal discipline, tax reforms
  • Presenting budget when global economy in a serious crisis
  • Amidst global headwinds, the Indian economy has held its own
  • Converted challenges we inherited into opportunities
  • CPI inflation down to 5.4 per cent from 9 per cent plus, bringing big relief to the public
  • Forex reserves at highest-ever level 



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