Marginal tax relief of upto Rs 6,600 for small tax payers, a 3 per cent hike in surcharge on super-rich, new levies on cars and SUVs and a compliance window to domestic black money holders were unveiled in the Budget for 2016-17 that envisages a huge spending of Rs 1.77 lakh crore in rural areas to address the agrarian distress.
Presenting his third Budget, Finance Minister Arun Jaitley made no changes in the personal or corporate income- tax slabs but made costlier several items including electricity, jewellery, readymade garments, mineral water and aerated drinks, tobacco and cigarettes by raising duties.
The Budget brought in a new 0.5 per cent Krishi Kalyan Cess on all taxable services to fund agriculture while proposing a retirement tax on 60 per cent of the pension and provident fund corpus including EPF created after April 1, 2016.
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Against expectations of incentives for industry hit by global slowdown and shrinking exports, the Budget did not offer anything major.
While deciding to stick to to fiscal deficit roadmap, he unveiled a new policy for sale of PSUs to raise additional resources as well as tried to address lingering tax issues with one-time settlement offers.
While the revenue loss on direct taxes will be Rs 1060 crore, his indirect tax proposal will mobilise an additional Rs 20,670 crore. Net revenue gain will be Rs 19,610 crore.
Asked about comments that the Budget was left-of-centre, Jaitley said, "it is neither left nor right but deals with the reality of Indian economy. It addresses sectors which need highest priority and rural areas need most attention."
"There is a serious challenge, if not distress, in the rural sector and we have given priority to the social sector and infrastructure. This Budget is a combination of several things," he said.
