 "Budget 2016: Finance Minister Arun Jaitley with MoS Finance Jayant Sinha (Photo: Twitter)")
In a Union Budget that clearly indicated a shift in focus to the rural economy, Finance Minister Arun Jaitley introduced a slew of taxes and cess to be imposed on services to help rural welfare programmes.
Business Standard takes a look at some of the highlights from the tax proposals in the Union Budget 2016-17.
Income tax remains unchanged
Read our full coverage on Union Budget 2016
Income tax slabs for the financial year 2016-17 has remained unchanged, the finance minister announced in the Parliament today.
Pensions to be partially taxable
Under the National Pension Scheme, the government announced an exemption for withdrawal of up to 40% of the corpus at the time of retirement.
Meanwhile, in case of recognised provident funds, including the EPF, the same norm as NPS will be applied. It implies introduction of taxes on withdrawals from such instruments, which had a total tax-free withdrawal, will now come under the tax ambit.
House rent allowance cheer
Jaitley said that the tax exemption for house rent allowance will be raised to Rs 60,000 from the current Rs 24,000-level.
This deduction is for those, who don’t get the house rent allowance from their employer. Such person can avail this deduction according the specified rules.
There are some conditions for this benefit. Assessee or his spouse or minor child should not own residential accommodation at the place of employment.He should not get a house rent allowance (HRA).He should not have self occupied residential premises in any other place
There are some conditions for this benefit. Assessee or his spouse or minor child should not own residential accommodation at the place of employment.He should not get a house rent allowance (HRA).He should not have self occupied residential premises in any other place
Service tax
The government, in the Union Budget for 2016-17, decided to keep service tax rates unchanged at 14.5% (14% service tax + 0.5% Swach Bharat Cess)
Certain announcements also ensured there were some ‘taxing times’ ahead for the common man.
Buying a car costlier now
An additional 1% tax on luxury cars above Rs 10 lakh was imposed by the Centre in the Union Budget today.
The Centre also imposed an additional infrastructure cess of 1% on small petrol cars and a 2.5% cess on diesel cars.
Krishi Kalyan Tax
Jaitley announced a 0.5% tax on all taxable services under the Krishi Kalyan tax in a bid to benefit the farming community.
Cigarettes to cost more
Excise duties on various tobacco products other than beedi have been raised by about 10-15%, Jaitley said in Parliament.
