Arun Jaitley, in his Budget 2017 announcements, called India a largely tax non-compliant society.
Empathizing with honest taxpayers, Jaitley said the burden of tax-evaders falls on them. Jaitley lauded his government’s demonetization of INR 500 &1000 notes and said data mining post demonetization will help in an increase in tax revenue.
While pegging the FY18 fiscal deficit at 3.2 percent, Jaitley said the government hopes to bring the deficit to 3 percent in the following year.
Here are the top 5 tax liabilities & amendments outlined by the government on personal income tax and corporate tax.
Personal Income Tax
- Professionals earning up to INR 3 lakh will enjoy zero tax liability.
- Individuals earning INR 2.5 – INR 5 lakh a year will now be taxed at 5 per cent instead of 10 percent.
- A single-page income tax return filing form for taxable income under INR 5 lakh to ease tax filing.
- Those with income between INR 50 lakh and INR 1 crore, 10 per cent surcharge will be imposed.
- For persons earning above INR 1 crore, the surcharge stays.
- Income tax for companies with a turnover of INR 50 crore to be cut to 25 percent, Jaitley said. This move is expected to benefit 96 percent of Indian companies especially SMEs.
- The government plans to extend the basket of financial instruments to which the capital gains can be invested without the payment of tax. There will be no change in capital gains taxation for listed entities.
- Jaitley has proposed to allow a carry forward of Minimum Alternative Tax for a period of 15 years up from the current 10 years now.
- The government said the implementation of the Goods and Services tax will bring more taxes to states and centre. This is expected to help companies reduce their tax burden.
- No changes have been announced in service tax rates. With respect to excise rates, the government increased excise duty on cigars and cheroots to 12.5 per cent or Rs 4,006 per thousand, whichever is higher, from 12.5 per cent or Rs 3,755 earlier. Excise duty on pan masala products has been increased to 9 per cent from 6 per cent. Other unmanufactured tobacco excise duty up to 8.3 per cent from 4.2 per cent earlier.