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Budget 2016 top takeaways: Start-ups to get 100% tax exemption for 3 yrs

, by indianmilitaryveterans

Indian Military Veterans




Office-goers walk past a digital screen showing finance minister Arun Jaitley delivering his Budget speech at Parliament in New Delhi on February 29, 2016. (Kunal Patil/HT Photo)



Finance minister Arun Jaitley kept his focus on boosting the rural economy, announcing higher spending in the sector to fire demand as he presented his second full budget on Monday.
During Jaitley’s Budget speech on Monday, Sensex crashed over 600 points and Nifty down over 200 points on taxation proposals.
Jaitley’s Budget speech: As it happened
# 4-month Compliance Window for domestic black money holders; tax, interest on them at 45%.
# Surcharge on super-rich with income of over Rs 1 cr raised to 15%, from 12%.
# House rent deduction raised from Rs 20,000 to Rs 60,000.
# Corporate Tax for new manufacturing units fixed at 25%.
# First home buyers to get addl deduction of Rs 50,000 on interest for loan up to Rs 35 lakh; cost of house should not be more than Rs 50 lakh.
# Budget lists 9 transformative pillars including doubling farm income by 2022, infrastructure, investment, reforms.
# Start-ups to get 100% tax exemption for 3 years except MAT which will apply from April 2016-2019.
# To give statutory status to Aadhaar programme.
# Jaitley concludes Budget 2016 speech, which lasted for 1 hour 41 minutes.
# No change in Income Tax slab.
# I propose to amend customs act to provide for deferred payment of custom duty for importers & exporters within proven track record.
# I accept suggestion from Rahul Gandhi on providing relief(exemption of duty on braille paper) to differently-abled people.
# I propose to abolish 13 different cesses levied by various ministries in which revenue collection is less than Rs 50 crores per year.
# Excise duty on most tobacco products raised by 10-15%.
# Limited tax compliance window: 45% incl surcharge and penalties and immunity from prosecution.
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Tax rebate under Section 87A increased to Rs.5000

, by indianmilitaryveterans

Indian Military Veterans
Union Finance Minister Shri Arun Jaitley spoke on the Key Reform Measures in his Budget speech 2016-17
Increased relief for middle-class tax-payers
  • by raising the ceiling of tax rebate under Section 87A to Rs. 5,000 for individuals with income less than Rs. 5 lakhs
  • and by raising the limit of deduction of rent paid under section 80GG to Rs. 60,000
1. The Government is firm on its course towards fiscal consolidation without compromising on its development agenda. 3.5% fiscal deficit is targeted for FY 2017.
2. Total allocation for Agriculture, Farmers’ welfare and Irrigation set at Rs. 47,912 cr, which is nearly twice the allocation of the previous year.
3. New Health Protection scheme will provide health cover up to Rs. 1 lakh per family and additional Rs. 30,000 for senior citizens.
4. Free LPG connections will be provided in the name of woman member of a family to 1.5 cr BPL households in 2016-17 and to continue for two more years to cover 5 cr households in total.
5. Massive increase in public spending on infrastructure to Rs. 2.21 lakh cr, an increase of 22.5% over the previous year.
6. Higher Education Financing Authority set up, with an initial capital base of Rs. 1,000 cr to promote higher education. In addition, 10 public and 10 private institutions to emerge as world-class Teaching and Research Institutions.
7. Promoting a tax-friendly regime and minimizing hassles due to litigation through a New Dispute Resolution Scheme with low or zero penalties. Ongoing tax cases can be settled with ease.
8. Increased relief for middle-class tax-payers by raising the ceiling of tax rebate under Section 87A to Rs. 5,000 for individuals with income less than Rs. 5 lakhs and by raising the limit of deduction of rent paid under section 80GG to Rs. 60,000.
9. Directly providing financial and other subsidies benefits to people who deserve them by enacting a new law and developing a social security platform using Aadhar.
10. Boosting formal sector employment by provisioning Rs. 1,000 cr towards contributing 8.33% on behalf of all new employees enrolling in EPFO for the first three years of their employment.
11. Simplified and pro-market tax measures such as laying out the roadmap of phasing out of exemptions under Corporate Taxes, abolishing small cesses, providing complete pass through of income-tax to securitization trusts and reducing period of obtaining long-term capital gains treatment for unlisted companies to three years.
12. Promoting entrepreneurship by increasing the turnover limit under Presumptive taxation scheme to Rs. 2 cr, targeting to disburse loans worth Rs. 1.8 lakh cr under PM Mudra Yojana and providing 100% deduction of profits for 3 out of 5 years for start-ups.
13. Facilitating Affordable Housing by 100% tax exemption for profits from small projects, not subjecting distribution REITs and INVITs to Dividend Distribution Tax and encouraging small first-time home buyers by deducting ¬additional interest of Rs. 50,000.
14. Reducing black money through a scheme to declare undisclosed income by paying 45% tax in a given compliance window.
15. Strengthening the financial sector by allocating Rs. 25,000 cr towards recapitalising Public Sector Banks (PSBs), listing Government-owned General Insurance companies, and spelling out a roadmap for consolidating PSBs.

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Annual Budget 2016 – Will the income tax slab increase? Or, will it not?

, by indianmilitaryveterans

Indian Military Veterans

“It is important to keep in mind the expectations of Central Government employees, who accurately calculate and set aside more than their one month’s salary to pay income tax each year.”

The annual budget of 2016 is being presented today. Expectations are high that Modi Government will fulfill the requirements of the farmers, industrialists and Central Government employees.

There are conflicting rumours that the income tax slab is likely to be raised this year. Some say that it wouldn’t. 

The Railway Budget was presented on February 25. The Annual Budget of 2016-17 will be presented at 12.00 PM today (February 29, 2016). This is the third general budget presented by the Modi Government’s Finance Minister Arun Jaitley. 

With the Government requiring more than Rs.1 lakh crore to implement the recommendations of the 7th Pay Commission, Arun Jaitley’s budget will reveal how the government intends to raise these funds, and for raising the capital required for the banks. 

The minimum income tax slab for individuals is currently Rs.2.5 lakhs. With increasing prices, the salaried class is eagerly expecting an increase in the tax slabs. Therefore, announcements regarding this are expected in the Budget. With assembly elections scheduled to be held in five states in the near future, the chances of raising the tax slabs are bright. 

With the subsidy burden increasing on the Government, the subsidies for those with annual income above a certain level, will very likely be cancelled. LPG subsidy is very likely to be stopped. And, the number of subsidized cylinders is also likely to be reduced. 

In order to increase the revenue for the government, indirect taxes are likely to be increased. Service taxes are likely to be increased from 14.5 percent to 18 percent. 

Since the import of gold has been increasing, the Rupee is fast losing its value against the US Dollar. Therefore, import tax on gold is likely to increase, according to the sources at the Finance Ministry. 

“The annual exams of the students are starting tomorrow. I’m writing my exams today. I’m confident that I will get through,” Prime Minister Narendra Modi said, about the Budget.

Updated news on Tax

No changes have been made to existing income tax slabs

1% service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.

Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses.

Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.

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Highlights of General Budget 2016

, by indianmilitaryveterans

Indian Military Veterans
 

Union Finance Minister Shri Arun Jaitley spoke on the Key Reform Measures in his Budget speech 2016-17
1. The Government is firm on its course towards fiscal consolidation without compromising on its development agenda. 3.5% fiscal deficit is targeted for FY 2017.
2. Total allocation for Agriculture, Farmers’ welfare and Irrigation set at Rs. 47,912 cr, which is nearly twice the allocation of the previous year.
3. New Health Protection scheme will provide health cover up to Rs. 1 lakh per family and additional Rs. 30,000 for senior citizens.
4. Free LPG connections will be provided in the name of woman member of a family to 1.5 cr BPL households in 2016-17 and to continue for two more years to cover 5 cr households in total.
5. Massive increase in public spending on infrastructure to Rs. 2.21 lakh cr, an increase of 22.5% over the previous year.
6. Higher Education Financing Authority set up, with an initial capital base of Rs. 1,000 cr to promote higher education. In addition, 10 public and 10 private institutions to emerge as world-class Teaching and Research Institutions.
7. Promoting a tax-friendly regime and minimizing hassles due to litigation through a New Dispute Resolution Scheme with low or zero penalties. Ongoing tax cases can be settled with ease.
8. Increased relief for middle-class tax-payers by raising the ceiling of tax rebate under Section 87A to Rs. 5,000 for individuals with income less than Rs. 5 lakhs and by raising the limit of deduction of rent paid under section 80GG to Rs. 60,000.
9. Directly providing financial and other subsidies benefits to people who deserve them by enacting a new law and developing a social security platform using Aadhar.
10. Boosting formal sector employment by provisioning Rs. 1,000 cr towards contributing 8.33% on behalf of all new employees enrolling in EPFO for the first three years of their employment.
11. Simplified and pro-market tax measures such as laying out the roadmap of phasing out of exemptions under Corporate Taxes, abolishing small cesses, providing complete pass through of income-tax to securitization trusts and reducing period of obtaining long-term capital gains treatment for unlisted companies to three years.
12. Promoting entrepreneurship by increasing the turnover limit under Presumptive taxation scheme to Rs. 2 cr, targeting to disburse loans worth Rs. 1.8 lakh cr under PM Mudra Yojana and providing 100% deduction of profits for 3 out of 5 years for start-ups.
13. Facilitating Affordable Housing by 100% tax exemption for profits from small projects, not subjecting distribution REITs and INVITs to Dividend Distribution Tax and encouraging small first-time home buyers by deducting ¬additional interest of Rs. 50,000.
14. Reducing black money through a scheme to declare undisclosed income by paying 45% tax in a given compliance window.
15. Strengthening the financial sector by allocating Rs. 25,000 cr towards recapitalising Public Sector Banks (PSBs), listing Government-owned General Insurance companies, and spelling out a roadmap for consolidating PSBs.
Source: PIB News

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