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Budget 2016 highlights

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%

About Prateek Agarwal

I am Chartered Accountant by profession, practicing in Jaipur. I have interest in accounting and taxation field.

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