Budget 2017: What FM Arun Jaitley’s announcements mean for you
Finance minister Arun Jaitley presented on Wednesday a budget that encouraged business and provided relief to people in the lower tax bracket without succumbing to populism in the run-up to the assembly elections in five states.union budget Updated: Feb 02, 2017 13:23 IST
Finance minister Arun Jaitley presented on Wednesday a budget that encouraged business and provided relief to people in the lower tax bracket without succumbing to populism in the run-up to the assembly elections in five states.
In an attempt to soothe tempers frayed by demonetisation, the Centre slashed the tax rate for individuals in the Rs 2.5 lakh-Rs 5 lakh annual income bracket from 10% to 5%. However, it sought to compensate for this cut by levying 10% surcharge on individuals with an annual taxable income between Rs 50 lakh and Rs 1 crore.
The budget set Rs 10 lakh crore as the target for agricultural credit in 2017-18, with special emphasis on flow of funds to Jammu & Kashmir and the country’s eastern states. It also fulfilled Prime Minister Narendra Modi’s promise of granting 60 days’ interest waiver to farmers on loans from the cooperative credit structure. Besides this, the budget earmarked a sum of Rs 9,000 crore for crop insurance against natural disasters under the Fasal Bima Yojana.
Aspiring house owners found a special place in Jaitley’s budget, with a proposal to raise allocation for the Prime Minister Awas Yojana from Rs 15,000 crore to Rs 23,000 crore. However, no specific incentive was announced for first-time buyers.
In a proposal aimed at bringing cheer to 96% of the business establishments in India, Jaitley reduced the tax rate for companies with an annual turnover of up to Rs 50 crore by a whopping 25%. Also, with the Union budget extending a concessional 5% withholding tax for the next three years, Indian companies seeking foreign debt are likely to see its cost of capital fall amid a rise in overseas investor interest.
As far as small investors are concerned, a draft bill aimed at curtailing the menace of illicit deposit schemes will be introduced soon.
Zero tax on income up to Rs 3 lakh per annum
Rs 2,500 tax liability for people with income between Rs 3 lakh and Rs 3.5 lakh
Zero tax liability on income of Rs 4.5 lakh if the limit of Rs 1.5 lakh under Section 80C is used fully
Rs 12,500 uniform benefit for taxpayers in Rs 5 lakh to Rs 50 lakh category
15% existing surcharge on tax for people earning more than Rs 1 crore stays
FOREIGN COMPANIES GAIN 5% concessional withholding rate charged on interest earned by foreign entities in external commercial borrowings or in bonds and government securities extended to June 30, 2020
MAT CARRYOVER 15 years to be the carry-forward period for minimum alternate tax (MAT), instead of 10 years at present, to enable companies to use MAT credit in future years
MARKET REFORMS The commodities markets will undergo reforms. A panel will study and promote creation of an operational and legal framework to integrate spot market and derivatives market for commodities trading
DISPUTE RESOLUTION Bill to streamline resolution of disputes in infrastructure-related construction contracts, PPP and public utility agreements
CHEAPER RATES 60 days’ interest waiver on loans from the cooperative credit structure, as announced by Prime Minister Narendra Modi in his address to the nation on December 31
MILD MNREGA SUCCOUR Rs 48,000 cr for MNREGA, a slight rise over last year’s revised estimate of Rs 47,500 crore, may not be enough to help note ban-hit workers who’ve gone back to villages
SKILLS 600 districts, from 60 earlier, to be covered by Pradhan Mantri Kaushal Kendras for promotion of skill development among the youth
Ordinary Indians dreaming of owning a house will benefit as allocation for the Prime Minister Awas Yojana was raised from Rs 15,000 crore to Rs 23,000 crore, though no specific incentives were announced for first-time buyers
*Higher funds for the scheduled castes at Rs 52,000 crore will help the socially disadvantaged