Here are some of the key highlights from the tax proposals in the union budget 2016-2017 presented by Finance Minister Arun Jaitley.
- Income tax slab rates for the financial year 2016-2017 remained unchanged.
- Excise duty on most tobacco products raised by 10-15%
- Jaitley proposes to lower corporate IT rate for next financial year of relatively small enterprises companies with turnovers not exceeding Rs 5 cr.
- Section 80GG deduction limit in respect of rent paid by individuals who do not get any house rent allowance from the employer and who do not own any house has been increased from Rs 24,000 per year to Rs 60,000 per year.
- No change in Service tax rate which is at present charged at the rate of 14.5% (14% service tax + 0.5% Swach Bharat ess).
- Additional 1% tax on luxury cars above Rs 10 lakh, infrastructure cess of 1% on small petrol cars and a 2.5% cess on diesel cars was imposed by the Centre in the Union Budget today.
- 5% tax on all taxable services under the Krishi Kalyan tax in a bid to benefit the farming community.
- People who do not have any house of their own & don’t get any house rent allowance from their employer get a reduction of Rs 24000 per year.
- To lessen burden on individuals with income not exceeding 5 lakh per year, our Finance Minister Arun Jaitley propose sealing of tax rebate under sec 87A from Rs 2000 to Rs 5000. This means, benefit of Rs 5000 rebate will be available to resident individuals in the lower income slab i.e. total income not exceeding Rs. 5, 00,000
- Section 44AB limit of Rs 25 lakhs for the professionals has now been increased to Rs 50 Lakhs.
- Threshold limit for availing the benefit of presumptive taxation scheme under section 44AD proposed to be increased from Rs. 1 crore to Rs. 2 crore.
- Section 44ADA has been introduced in Budget 2016 – in the case of an assessee,being a resident in India, who is engaged in a profession referred to in sub-section (1) of section 44AA and whose total gross receipts do not exceed 50 lakh rupees in a previous year, a sum equal to 50% of the total gross receipts of the assessee in the previous year on account of such profession or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the assessee, shall be deemed to be the profits and gains of such profession chargeable to tax under the head “Profits and gains of business or profession”.
- Companies with turnover not exceeding Rs. 5 crore in the financial year ending March 2015, the rate of corporate tax reduced from 30% to 29% plus surcharge and cess, for the next financial year.
- Section 192A – Limit of Rs 30000 in case of TDS on Employee Provident Fund or EPF withdrawals has now been proposed increased to Rs 50,000.
- Section 194BB – Limit of Rs 5000 in case of TDS on horse racing has been increased to Rs 10,000.
- Section 194C – Limit of Rs 75, 000 on TDS on contracts has now increased to Rs 1,00,000.
- Section 194D – Limit of Rs 20,000 on TDS on Insurance commission has now been changed to Rs 15,000.
- Section 194H – TDS on commission or brokerage has now been reduced to 5% from the earlier rate of 10% and the limit has been increased to Rs 15000 from the earlier limit of Rs 5000.
Government has also confirmed that Companies Act to be amended for ease of doing business; to enable registration of companies in a day