Jaitley budgets for growth, offers tax sops for salaried
01 February 2017
Presenting the fourth annual budget of the NDA government in Parliament today, finance minister Arun Jaitley proposed to ramp up spending on rural areas, infrastructure and poverty alleviation, even as he sought to reduce the tax burden on individual taxpayers, especially in the lower tax brackets.
Stating that the impact on growth from the government's cash crackdown would wear off soon, Jaitley said he has budgeted for the poor. Yet, while vowing prudent fiscal management, he also raised the central government's fiscal deficit target for fiscal 2017-18 to 3.2 per cent of gross domestic product to cover the increase in spending.
Jaitley proposed nil tax on incomes up to Rs3 lakh and a halving of tax rate to 5 per cent on incomes up to Rs5 lakh. All other categories of taxpayers in subsequent brackets will get benefit of Rs 12,500. The move will cost the government Rs15,500 crore
Those earning between Rs50 lakh and Rs1 crore will have to pay a surcharge of 10 per cent on their personal income, which will yield the government Rs2,700 crore .
The surcharge of 15 per cent will continue for all taxpayers earning Rs1 crore and above. The increase in surcharge will help the government earn more.
Finance minister further said that the government plans to enforce greater accountability on tax officer.
''I have outlined in the budget an overarching theme to transform, energise and clean India,'' said the finance minister.
In order to facilitate higher investment in affordable housing, the finance minister proposed that affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits. In addition to the interest subvention for housing loans announced by the prime minister and the reduced lending rates by banks post-demonetisation, the National Housing Bank will refinance individual housing loans of about Rs20,000 crore in 2017-18.
He also proposed an increase in the allocation for welfare of women and children from Rs1,56,528 crore in Budget Estimates for 2016-17 to Rs1,84,632 crore in 2017-18 in the General Budget 2017-18.
For the welfare of women and children under various schemes across all ministries the union minister for finance and corporate affairs, Arun Jaitley in his budget speech today said that the allocation has been increased from Rs1,56,528 crore in BE 2016-17 to Rs1,84,632 crore in 2017-18.
Jaitley in his speech announced setting up of Mahila Shakti Kendra at village level with an allocation of Rs500 crore in 1.4 million ICDS Anganwadi Centres. He said that these centres will provide one stop convergent support services for empowering rural women with opportunities for skill development, employment, digital literacy, health and nutrition. He also said that under the nationwide scheme for financial assistance to pregnant women announced by Prime Minister on 31 December 2016, Rs6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children.
In a bid to give a push to digital economy and weed out corruption and black money, Jaitley proposed that no transaction above Rs3 lakh will be permitted in cash. The decision follows suggestion by Special Investigation Team on Black Money to ban cash transactions above Rs3 lakhs.
Jaitley also announced a slew of reliefs in the government's continuing policy towards providing an environment of ''Ease of Doing Business''.
Accordingly, he raised the threshold limit for audit of business entities that opt for presumptive income scheme from Rs1 crore to Rs2 crore. Similarly, the threshold for the maintenance of books for individuals and HUF is proposed to be increased from turnover of Rs10 lakh to Rs25 lakh or income from Rs1.2 lakh to Rs2.5 lakh.
The finance minister further said that the foreign portfolio investor (FPI) Category I & II will be exempt from indirect transfer provision under the I-T Act. Besides, indirect transfer provision will not apply in case of redemption of shares or interests outside India as a result of or arising out of redemption or sale of investment in India which is chargeable to tax in India. This will remove apprehensions over taxation upon transfer of stake of investors of India-based funds located abroad but investing in India-based companies, he added.
Bringing relief to individual insurance agents, Jaitley said they will be exempted from the TDS provision of 5 per cent being deducted from commission payable after filing a self-declaration that their income is below taxable limit. Professionals with receipt up to Rs50 lakh per year can pay advance tax towards presumptive taxation in one installment instead of four.