Thursday, September 1, 2016

Budget 2016 Highlights

Income Tax
Income tax slab is not changed
Maximum deduction under section 87A increased to Rs. 5,000.
Maximum limit of deduction of rent under section 80GG is increased from Rs. 24,000 to Rs. 60,000 p.a.
Lowering of Corporate IT rate for companies not exceeding Rs. 5 crore turnover to 25% plus surcharge.
Tax holiday for startups for three of five years of setting up the company
40% of withdrawal at the time of retirement under National Pension Scheme to be tax exempt.
Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.
1 per cent service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.
Infrastructure and agriculture cess to be levied.
Dividend Tax rate of 10% for individuals/HUF if dividend in excess of 10 lakh/annum
To lower penalty to 50% of tax in case of under-reporting of income.
15% surcharge on income tax for those with incomes exceeding 1 crore per annum
Other Taxes
No Service Tax for houses built under 60 square metres.
Excise duty on tobacco increased by 10-15 per cent.
4% high capacity tax for SUVs.
Propose to abolish 14 different cesses levied by ministers
STT increase in options
Creating 11 new benches of Indirect Tax tribunal
Other Important Points
Amendment to the Companies Act to ensure speedy registration and boost start-ups.
Government to provide health insurance of upto Rs. 1 lakh per family; top up of Rs. 35,000 for people above 60 years.
Rs. 1,700 crore for 1500 multi-skill development centres.
Small shops should be given the choice to remain open on all 7 days a week.
10,000 km of National Highway, 50,000 state highways to be converted to National Highway
Employee Provident Fund (EPF) contribution by government of 8.33% for new employees for 3 yrs.
FY17 fiscal deficit target at 3.5%

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