budget 2016 key policy announcements
Tax Reforms – to reduce compliance burden with faith in the citizenry
- Raise the ceiling of tax rebate under section 87A from INR 2,000 to INR 5,000 to lessen tax burden on individuals with income up to INR 5 Lakhs.
- Increase the limit of deduction of rent paid under section 80GG from INR 24,000 per annum to INR 60,000, to provide relief to those who live in rented houses.
- Companies with revenue less than INR 5 crores to be taxed at 29% plus surcharge.
- Dividend in excess of INR 10 lakh per annum to be taxed at additional 10% payable by the recipients.
- Infrastructure cess of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars and 4% on certain capacity of cars.
- Excise duty to be raised from 10 to 15 % on tobacco products other than beedis.
- 1% tax at source on purchase of luxury cars over INR 10 lakh and in-cash purchase of goods and services over INR 2 lakh.
- Limited tax compliance window from Jun 1 – Sep 30 for declaring undisclosed income at 45% including surcharge and penalties.
- Excise 1% imposed on articles of jewelry, excluding silver.
- 0.5% Krishi Kalyan Cess to be levied on all services.
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