Tax rate reduced to 5% on income Rs 2.5L-5L
01 February, New Delhi
Presenting the Union budget for 2017-18 in the Lok Sabha Wednesday, the Finance Minister said, there were legitimate expectations of the salary class after demonetization to reduce the tax burden.
He proposed reducing the present rate of income tax from 10 to 5 percent for the first slab of income from 2.5 lakhs to 5 lakh rupees.
With the existing benefit of rebate available to the group of beneficiaries, there would be zero tax liability for income upto 3 lakh rupees. To off-set the outgo of cash, he proposed a 10 percent surcharge of tax for those earning above 50 lakh rupees to one crore. There will be a simple one page Income tax return form for individuals earning upto 5 lakh rupees.
To stimulate growth, the budget proposes to reduce the income tax for medium and small enterprises with an annual turn-over of 50 crore rupees to 25 percent. More than 96 percent of these enterprises will get this benefit. Profit linked deduction available to the start-ups has been changed to 3 years out instead of 5 years.
Carry forward of minimum alternative tax extended upto 15 years, 5 years more than the present limit. To boost banking sector, the provision allowed for Non-Performing Assets has been increased from 7.5 percent to 8.5 percent.
The budget proposes no change in the service tax rates but make some modifications in the customs and Excise duty.
The budget which included the Railway budget also for the first time proposes no increase in rail fares or freight rates. To strengthen passenger safety, the budget proposes a Rashtriya Rail Sanraksha Kosh with a corpus of one lakh crores over a period of five years. Service charge on e-tickets booked through IRCTC has been withdrawn. The Government focus, however will be on Swachh rail.
By 2019, all coaches of Indian Railways will be fitted with bio-toilets. SMS based Clean My Coach Service has been started. Metro rail will get a boost with a new Metro Rail Act to be enacted soon.
Select airports in Tier-2 cities will be taken up for operation and maintenance in the Public Private Partnership mode. The allocation for infrastructure development goes upto nearly 4 lakh crore rupees.
The budget allocated 2,355 crore 68 lakh rupees for erection of barbed wire fencing, construction of roads and induction of hi-tech surveillance on Indo-Bangladesh and Indo-Pak borders.
The Intelligence Bureau, responsible for gathering internal intelligence has been allocated over 1,577crore rupees, while Special Protection Group will get over 389 crore rupees. National Intelligence Grid, which aims to link databases as an input in combating terrorism and intends to create a facility to improve capability to counter internal security threats, has an outlay of 45 crore 57 lakh rupees.