Affirming that the Indian economy has held its ground firmly amidst global headwinds, Finance Minister Arun Jaitley unveiled the Union Budget for fiscal year 2016-17 today.
The key tax rates are discussed below:
~ The ceiling of tax rebate for individuals, who have income less than ₹500,000, has been raised to ₹5,000.
~ The limit of deduction in case of rent paid has been increased from ₹24,000 to ₹60,000.
~ Withdrawals of up to 40 per cent of the corpus at the time of retirement will be tax exempt, in case of National Pension Scheme.
~ Individuals, HUFs and firms which receive dividend of more than ₹1,000,000 per annum, will be taxed at the rate of 10 per cent.
~ The threshold limit of presumptive taxation has been increased to ₹20,000,000. The presumptive taxation scheme has also been extended to professionals with gross receipts up to ₹5,000,000, with the presumption of profit being 50 per cent of the receipts.
~ Manufacturing companies incorporated on or after March 1, 2016 have been given an option to be taxed at 25 per cent, subject to certain conditions.
~ For those companies whose turnover doesn’t exceed ₹50,000,000, corporate income tax has been reduced to 29 per cent.
~ To boost the start-up culture, a 100 per cent deduction of taxes on profits has been announced for start-ups set up during April 2016 and March 2019, for three out of five years.
While presenting the budget, Arun Jaitley stressed that the Government’s priority is to provide additional resources for vulnerable sections and reiterated that it would endeavour to continue the implementation of important reform measures (Goods and Service Tax, Insolvency and Bankruptcy law) which are pending before the Parliament.
A number of other key reforms were discussed as well. Hover over images to see the points discussed, and click each image to read the reforms.
The Finance Minister had been receiving conflicting advices on either favouring fiscal consolidation and stability, since the global turmoil may throw in surprises, or favour a less aggressive fiscal consolidation by boosting growth.
It is quite evident that meeting the fiscal target has been the priority in the Union Budget.