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February 7, 2017Highlights of Union Budget 2017-18 : Income Tax Relief
Finance minister Arun Jaitley on Wednesday (1-Feb-2017) gave marginal relief to the country’s taxpayers in the 2017 budget but disappointed those who expected big breaks to cushion the demonetisation blow. Jaitley’s biggest tax announcement was halving of the lowest rate of personal tax to 5% for annual incomes between Rs 2.5 lakh and Rs 5 lakh. “This would reduce the tax liability of all persons below Rs 5 lakh income either to zero (with rebate) or 50% of their existing liability,” said Jaitley. He left the exemption limit unchanged at Rs 2.5 lakh. With the reduction, those earning Rs 3 lakh will continue to be exempt from paying taxes, as the government provides Rs 5,000 rebate under the income tax act to all those earning up to Rs 5 lakh. As of now, the tax on Rs 3 lakh income is Rs 5,000 but after the rebate of Rs 5000 the effective tax is nil. With the reduction in the slab, all taxpayers earning more than Rs 5 lakh will get a benefit of Rs 12,500.
“While the taxation liability of people with income upto Rs 5 lakh is being reduced to half, all the other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs 12,500 per person,” he said. But, those earning between Rs 50 lakh and Rs 1 crore will now have to pay a surcharge of 10%. The surcharge of 15% will continue for people with an income of Rs 1 crore and above. This is likely to give the exchequer an additional Rs 2,700 crore, Jaitley said. “Fiscal prudence has prevailed over populism… budget continues the agenda of growth for all and focus on global and India realities,” Sonu Iyer, tax partner and people advisory services leader, EY India, said.
Jaitley recognised the contribution of the salaried class to the tax revenues but didn’t meet the expectation of standard deduction of tax payers, he said. Stressing on the need to widen the tax base, Jaitley said India was largely a tax non-compliant society. To simplify the procedure and encourage compliance, he announced a simple one-page form for individuals with taxable income of up to Rs 5 lakh. Those with a taxable income of Rs 5 lakh and filing returns for the first time would be exempt from scrutiny in the first year “unless there is specific information available with the (IT) department regarding his high value transaction”, the minister said.
In India only about 1% out of 1.25 billion people pay taxes. Among the 37 million individuals who filed tax returns in 2015-16, 9.9 million showed income below the exemption limit of Rs 2.5 lakh. Around two 19.5 million showed income between Rs 2.5 lakh and Rs 5 lakh. While 5.2 million showed income between Rs 5 lakh and Rs 10 lakh, and only 2.4 million declared income above Rs 10 lakh. Of the 7.6 million individual who declared income of above Rs 5 lakh, 5.6 million are the salaried class. The number of people showing income more than Rs 50 lakh in the country was only 172,000, Jaitley said.
“We can contrast this with the fact that in the last five years, more than 1.25 crore cars have been sold, and number of Indian citizens who flew abroad, either for business or tourism, is 2 crore in the year 2015,” he said. The minister said data received post-demonetisation would be used to expand the tax base. “After demonetisation, the preliminary analysis of data received in respect of deposits made by people in old currency presents a revealing picture. This data mining will help us immensely in expanding the tax net as well as increasing the revenues,” he said.
BUDGET 2017 - What's Cheaper & More Expensive
- CHEAPER
- RAILWAY TICKET
- CHEAPER
- LEATHER GOODS
- CHEAPER
- LED BULBS
- CHEAPER
- MEDICINES
- CHEAPER
- WINDMILLS
- CHEAPER
- SOLAR-ENERGY
- CHEAPER
- TECHNOLOGY
- CHEAPER
- TRAIN FARES
- CHEAPER
- POS MACHINES
- CHEAPER
- AIR TRANSPORT (REMOTE LOCATIONS)
- CHEAPER
- LIQUEFIED NATURAL GAS
- EXPENSIVE
- CIGARETTE
- EXPENSIVE
- CHEWING TOBACCO
- EXPENSIVE
- JEWELLERY
- EXPENSIVE
- MOBILE PHONES
- EXPENSIVE
- PAN MASALA
Headlines
- Arun Jaitley's low-key Budget misses demonetisation note
- Budget 2017 can put India firmly back on growth track: Shikha Sharma
- Balancing growth with fiscal prudence to boost confidence of stakeholders
- FM Jaitley’s assurance about GST corroborates govt’s intent for earliest rollout
- Booster for demonetisation as FM limits cash donations to political parties
- Government arms tax officers with sweeping powers for searches and surveys
- Government introduces alternative funding mechanism of electoral bonds
- Budget 2017: Budget handholds India to take nextstep in digitisation
- Govt abolishes two decade old FIPB, to bring more FDI policy easing reforms
- Budget gives infra status to affordable housing, pledges to build 1cr rural houses
- Arun Jaitley gives highest ever allocation for MGNREGS in Budget 2017
- Reduced rate for MSMEs to benefit 96% of India’s companies
- 'PM Narendra Modi believes in systematic changes, not doles'
- Arun Jaitley raises credit to farmers to Rs 10 lakh crore
- Small savings help lower market borrowing
- No fix for ‘twin balance sheet’ problem
- Single AAR to deal with all taxes
- Railways gets Rs 1.31 lakh crore for development
- Budget 2017 marks the exit of central excise duty
- Budget 2017: Rural focus to spur consumption
- Every registered party will have to give details of one account to the EC: Arun Jaitley
- Budget 2017 takes radical steps quietly to a giant leap into India’s future: N Chandrababu Naidu
- Forgotten reforms becoming a non-performing asset for banking sector
- Local Manufacturing will see changes in their customs & excise duty structure
- National Testing Agency to conduct all entrance examinations for higher education institutions
- No bonus points for non-charity trusts
- Defence Budget up by 6 per cent to Rs 2.74L-cr in 2017-18 from Rs 2.58L-cr last year
- Budget 2017 at a glance: Readying the stage for GST
- Narendra Modi's long game: Why Budget 2017 may be last of its kind
- I-T dept can now reopen up to 10-yr old cases involving big transactions
- Dairy fund & easier flow of credit will help millions, accelerate farmer drive
- PM Narendra Modi redefines future, says Budget 2017 aims to fulfill dreams of all
- Digitisation is seen as being the best way of clamping down on tax evaders
- Budget 2017: MEA funds for projects in Afghanistan see a decline
