3. The Budget is document that states expenditure and income of the Government for
the current financial year and which reflects the direction of government policies and
on the last working day of February by the Finance Minister of India in Parliament.
The Budget have to pass by the house before it can come into effect on April 1,the
start of India's financial
priorities. the Union Budget
of India ,referred to as the
annual financial statement in
article 11 The Union Budget
of India ,referred to as the
annual financial statement in
article 112of the constitution
of India Presenting each year
5. S.No Income slab Resident
individual
less than 60
years
Resident
individual
more than 60
years but less
than 80 years
Resident
individual of
80 years or
above
1. Up to 2,50,000 Nil Nil Nil
2. 2,50,000 to
3,00,000
10% Nil Nil
3. 3,00,001 to
5,00,000
10% 10% NIL
4. 5,00,000 TO
10,00,000
20% 20% 20%
5. Above 10,00,001 30% 30% 30%
No Change in Individual Tax Rate (Other than Companies)
6. Raise the ceiling of tax rebate under section 87A from `2000 to `5000 to lessen
tax burden on individuals with income upto `5 lakh.
The existing provisions of Section 80GG provide for a deduction of any
expenditure incurred by an individual in excess of 10% of his total income
towards payment of rent in respect of any furnished or unfurnished
accommodation occupied by him for the purposes of his own residence if he is
not granted house rent allowance by his employer, to the extent such excess
expenditure does not exceed Rs. 2000 per month or 25% of his total income
for the year, whichever is less, subject to other conditions as prescribed
therein. The limit for deduction for rent paid under Section 80GG has been
increased from Rs. 2000 per month to Rs. 5000 per month, to provide relief to
those who live in rented houses and do not get House Rent Allowence from
the employers.
7. Particulars Present
Surcharge Rate
Proposed
Surcharge Rate
1. Other than Company -
Income exceeding
Rs. 1 crore
12% 15%
2. Domestic Company-
Income exceeding Rs. 1 crore
but less than Rs. 10 crore
5% 7%
Income exceeding Rs. 10 crore 10% 12%
3. Foreign Company-
Income exceeding Rs. 1 crore but
less than Rs. 10 crore
2% 2%
Income exceeding
Rs. 10 crore
5% 5%
8. Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt
in the case of National Pension Scheme (NPS). Annuity fund which goes to
legal heir will not be taxable.
In case of superannuation funds and recognized provident funds, including
EPF, the same norm of 40% of corpus to be tax free will apply in respect of
corpus created out of contributions made on or from 1.4.2016.
Limit for contribution of employer in recognized Provident and
Superannuation Fund of Rs. 1.5 lakh per annum for taking tax benefit.
Exemption from service tax for Annuity services provided by NPS and
Services provided by EPFO to employees.
Reduce service tax on Single premium Annuity (Insurance) Policies from
3.5% to 1.4% of the premium paid in certain cases.
.
9. 100% deduction for profits to an undertaking in housing project for flats
upto 30 sq. metres in four metro cities and 60 sq. metres in other cities,
approved during June 2016 to March 2019 and completed in three years.
MAT to apply
Deduction for additional interest of Rs.50,000 per annum for loans up
to Rs.35 lakh sanctioned in 2016-17 for first time home buyers, where
house cost does not exceed Rs. 50 lakh.
Exemption from service tax on construction of affordable houses up to
60 square metres under any scheme of the Central or State Government
including PPP Schemes.
Extend excise duty exemption, presently available to Concrete Mix
manufactured at site for use in construction work to Ready Mix
Concrete.
10. It is proposed that the interest
paid on capital borrowed for
acquisition or construction of a
self-occupied house property
shall be available if the
acquisition or construction is
completed within five years
from the end of the financial
year in which capital was
borrowed. The earlier time
limit was Three years.
11. Increase the turnover limit under
Presumptive taxation scheme other
then companies/LLP having
income from business under
section 44AD of the Income Tax
Act to ` Two crores to bring big
relief to a large number of
assessees in the Micro Small
Medium Enterprises (MSME)
category from One crore.
0
5000000
10000000
15000000
20000000
25000000
2015-16
2016-17
Limit
Turnover
%age of
Profit
12. Under the existing provisions of section 44AB of the Act every person
carrying on a profession is required to get his accounts audited if the total
gross receipts in a previous year exceed twenty five lakh rupees.
In order to reduce the compliance burden, it is proposed to increase the
threshold limit of total gross receipts, specified under section 44AB for getting
accounts audited, from twenty five lakh rupees to fifty lakh rupees in the
case of persons carrying on profession.
These amendments will take effect from 1st April, 2017 and will, accordingly,
apply to the assessment year 2017-18 and subsequent assessment years.
Section 44ADA :- The income any person making use to this section would be
assumed to be 50%of the total gross receipts for the year.
13. S.No Section Particulars Incentive
currently
available in the
Act
Proposed phase out
measures/Amendmen
t
1. 35(1)(ii) Expenditure on scientific research 175 150
2. 35(1)(iia) Expenditure on scientific research 125 100
3. 35(1)(iii) Expenditure on scientific research 125 100
4. 35(2AA) Expenditure on scientific research 200 150
5. 35(2AB) Expenditure on scientific research 200 150
6. 35AD Deduction in respect of specified
business.
150 100
7. 35CCC Expenditure on notified agricultural
extension project
150 100
Deduction shall be restricted from 01.04.2017 to 31.03.2020 (i.e. from previous year 2017-18 to previous
year 2019-20)`
14. Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt
in the case of National Pension Scheme (NPS). Annuity fund which goes to
legal heir will not be taxable.
In case of superannuation funds and recognized provident funds, including
EPF, the same norm of 40% of corpus to be tax free will apply in respect of
corpus created out of contributions made on or from 1.4.2016.
Limit for contribution of employer in recognized Provident and
Superannuation Fund of ` 1.5 lakh per annum for taking tax benefit.
Exemption from service tax for Annuity services provided by NPS and
Services provided by EPFO to employees.
Reduce service tax on Single premium Annuity (Insurance) Policies from
3.5% to 1.4% of the premium paid in certain cases.
15. Corporate tax rate was proposed to be reduce from 30% to 25% over a
period accompanied by rationalization and remove various tax
exemptions and incentives.
Accelerated deprecation will be limite to 40% From 01/04/2017.
weighted deduction U/s 35CCD For Skill deployment will continue up to
01/04/2020.
New manufacturing companies incorporated on or after 1.3.2016 to be
given an option to be taxed at 25% + surcharge and cess provided they do not
claim profit linked or investment linked deductions and do not avail of
investment allowance and accelerated depreciation.
Lower the corporate tax rate for the next financial year for relatively small
enterprises i.e companies with turnover not exceeding Rs.5 crore (in the
financial year ending March 201 5the rate of corporate tax reduced from 30%
to 29% plus surcharge and cess.
16. Additional tax at the rate of 10% of gross amount of dividend will be
payable by the recipients receiving dividend in excess of ` 10 lakh per
annum.
Securities Transaction tax in case of ‘Options’ is proposed to be
increased from .017% to .05%.
17. Present
Heads
Section
Heads Existing Threshold
Limit (Rs.)
Proposed
Threshod Limit
(Rs.)
192A Payment of accumulated balance due to an
employee
30,000 50,000
194BB Winnings from Horse Race 5,000 10,000
194C Payments to Contractors Aggregate Annual
limit of
75,000
Aggregate Annual
limit of
1,00,000
194LA Payment of Compensation on acquisition of
certain Immovable Property
2,00,000 2,50,000
194D Insurance commission 20,000 15,000
194G Commission on sale of lottery tickets 1,000 15,000
194H Commission or brokerage 5,000 15,000
18. Present
Section
Heads Existing Rate
of TDS (%)
Proposed Rate of
TDS (%)
194DA Payment in respect of Life Insurance
Policy
2% 1%
194EE Payments in respect of NSS Deposits 20% 10%
194D Insurance commission Rate in force
(10%)
5%
194G Commission on sale of lottery tickets 10% 5%
194H Commission or brokerage 10% 5%
These amendments will take effect from 1st June, 2016.
19. New Dispute Resolution Scheme to be introduced. No penalty in respect of
cases with disputed tax up to Rs. 10 lakh. Cases with disputed tax exceeding
Rs. 10 lakh to be subjected to 25% of the minimum of the imposable penalty.
Any pending appeal against a penalty order can also be settled by paying 25%
of the minimum of the imposable penalty and tax interest on quantum
addition.
One-time scheme of Dispute Resolution for ongoing cases under retrospective
amendment.
Penalty rates to be 50% of tax in case of underreporting of income and 200%
of tax where there is misreporting of facts.
Time limit of one year for disposing petitions of the tax payers seeking waiver
of interest and penalty.
20. (a) Scope for e-assessment proposed to be expanded: Expansion in the
scope of e-assessments to all assesses in 7 mega cities in the coming
years, reducing face to face contact with the assesses.
(b) Rate of interest on refunds to be increased: The rate of interest on the
refunds to be increased from 6% p.a. to 9% p.a., in case there is delay in
giving effect to Appellate order beyond ninety days.
(c) E-sahyog project to be expanded: Income-tax Department (ITD) will
fully expand the pilot initiative of ‘e-Sahyog’ with a view to reduce
compliance cost, especially for small tax payers. The e-Sahyog’ pilot
project is to provide an online mechanism to resolve mismatches in
income-tax returns without requiring taxpayers to attend the Income-tax
office.
21. For non-residents providing alternative documents to PAN card, higher TDS
not to apply
Revision of return extended to Central Excise assesses.
Additional options to banking companies and financial institutions, including
NBFCs, for reversal of input tax credits with respect to non- taxable services.
Customs Act to provide for deferred payment of customs duties for importers
and exporters with proven track record.
Customs Single Window Project to be implemented at major ports and airports
starting from beginning of next financial year.
Increase in free baggage allowance for international passengers. Filing of
baggage only for those carrying dutiable goods.
23. , wherein a scheme in respect of cases pending before Commissioner
(Appeals), in certain specified type of cases. The Assesse under above
scheme may deposit the disputed tax alongwith interest and 25%
penalty. The designated authority under such scheme shall within 15
days of the receipt of proof of payment, pass an order of
discharge. However, this scheme will not apply in certain specified type
of cases.
24. Service tax rate hike from 14.5% to 15% due to “krishi kalyan cess-0.5%”
levy.
Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016.
Proceeds would be exclusively used for financing initiatives for
improvement of agriculture and welfare of farmers. Input tax credit of
this cess will be available for payment of this cess.
25. Section 73:- As per proposed changes Show Cause Notice can be issued
within a period of 30 months from the date of filing of return instead of 18
months.
Section 75 :- Interest rate of 24% is chargeable on the amount of service tax
collected but not deposited to the government on or before the due date.
However, for other situations Interest Rate will be 15%.
Section 89 :-prosecution / imprisonment provisions are attracted where the
default amount exceeds Rs. Fifty lakhs. As per proposed amendment, such
amount of Rs. Fifty lakhs has been increased to Rs. Two Crores.
Section 90 and 91 :-The power to arrest in service tax law is proposed to be
restricted only to situations where the tax payer has collected the tax but not
deposited it with the exchequer, and amount of such tax collected but not paid
is above the threshold of Rs 2 crore. Big step !
26. Rule 7 of the Service Tax Rules A new sub-rule 3A has been inserted. As per
inserted rule, an Annual Return is required to be filed by 30th Nov of the
succeeding financial year in the form and manner as may be specified by the
government.
Rule 7B Annual return as stated above (Rule 7(3A) may be revised within one
month from the date of filing return
Rule 7C If the Annual return as stated above (Rule 7(3A) is filed late, a late
filing fee of Rs. 100/- subject to maximum of Rs. 20,000/- is payable.
Interest rate of 15% has been prescribed under Section 73B. As per Section
73B, if excess amount of Service Tax is collected by an Assesse, such amount
is payable with interest @ 15% to the department.
27. Exemption of service tax on services provided under Deen Dayal
Upadhyay Grameen Kaushalya Yojana and services provided by
Assessing Bodies empanelled by Ministry of Skill Development &
Entrepreneurship
Exemption of Service tax on general insurance services provided under
‘Niramaya’ Health Insurance Scheme launched by National Trust for the
Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and
Multiple Disability.
28. Excise duty of 1% without input tax credit or 12.5% with input tax
credit’ on articles of jewellery [excluding silver jewellery, other than
studded with diamonds and some other precious stones], with a higher
exemption and eligibility limits of Rs. 6 crores and Rs. 12 crores
respectively.
Excise on readymade garments with retail price of Rs. 1000 or more
raised to 2% without input tax credit or 12.5% with input tax credit
Excise duties on various tobacco products other than beedi raised by
about 10 to 15%.
29. Tax to be deducted at source at the rate of 1 % on purchase of luxury cars
exceeding value of ` ten lakh and purchase of goods and services in cash
exceeding ` two lakh.
• infrastructure cess, of 1% on
small petrol, LPG, CNG cars
engine capacity not exceeding
1200cc, 2.5% on diesel cars of
engine capacity not exceeding
1500cc and 4% on other
higher engine capacity vehicles
and SUVs. No credit of this
cess will be available nor
credit of any other tax or duty
be utilized for paying this
cess.
30. ‘Clean Energy Cess’ evied on coal, lignite and peat renamed to ‘Clean
Environment Cess’ and rate increased from Rs.200 per tonne to Rs.400
per tone
31. Section 5A of the Central Excise Act, 1944 (“the Excise Act”) has been amended to omit the
requirement of publishing and offering for sale any notification issued, by the Directorate of Publicity
and Public Relations of CBEC.
Section 11A of the Excise Act has been amended to increase the period of limitation from one year to
two years in cases not involving fraud, suppression of facts, willful mis-statement, etc.
Section 37B of the Excise Act has been amended to empower the Board for implementation of any other
provision of the said Act in addition to the power to issue orders, instructions and directions.
The Third Schedule has been amended to:
a) make some editorial changes, consequent to 2017 Harmonized System of Nomenclature .
b) include therein:
1) All goods falling under heading 3401 and 3402;
2) Aluminium foils of a thickness not exceeding 0.2 mm;
3) Wrist wearable devices (commonly known as „smart watches‟); and
4) Accessories of motor vehicle.
However, the amendment at b) will come into effect immediately owing to a declaration
under the Provisional Collection of Taxes Act, 1931.
32. Finance Minister Arun Jaitley announced a budget with the objective to
improve quality of life and to pass benefits to commonman.
