The Annual Budget for the Financial Year 2016-17 has elicited mixed responses from the salaried class in the national Capital. With no change in the tax slabs, and an additional cess taking the effective service tax to 15 per cent, the aam aadmi, while appreciating the intent behind the Budget, has been left somewhat disappointed.
However, the relief on loans on houses costing less than Rs 50 lakh and a relief of Rs 3,000 per year to taxpayers with income below Rs 5 lakh per year has been welcomed by the salaried class.
IT professional Amit Gupta, who works with the HCl, felt disappointed by no change in the tax slabs. “The biggest expectation that I had from the Budget was a change in the tax slabs. Every year the prices of commodities are increasing, the taxes on those commodities are increasing; but there is no increase in the tax slabs. In the end it’s the tax payers like us who end up paying more on all fronts,” he said.
Salman, who works as a graphic designer, concurred with Amit and said the focus has been on the vote bank, which was the case with earlier Governments as well. However, despite the Budget not bringing any relief to him personally, he seems satisfied with it.
“The fiscal policy seems similar to that of Congress Governments. I won’t get much relief from this Budget and will end up paying a little more in the form of ‘Krishi Kalyan cess’. But I feel that overall, the Budget is pro growth. You cannot please everyone, of course. There is some relief on housing loan and HRA, which is welcome. But it is not very significant and will not benefit all the tax payers,” he said.
Finance Minister Arun Jaitley has proposed levying of an additional cess of 0.5 per cent on all taxable services from June 1. This will take the effective service tax to 15 per cent (14 per cent service tax, 0.5 per cent Swachh Bharat cess and 0.5 per cent Krishi Kalyan cess.)
Deepak Malhotra, who works with Interglobe Technologies, is disappointed with the Government levying a cess on all motor vehicles including small cars. “While it may be justified to increase tax on luxury vehicles and diesel vehicles which cause pollution, but the 1 per cent cess on small cars will directly affect the middle class and lower-middle class,” he said.
The Government has proposed to levy 1 per cent additional tax on luxury cars costing more than Rs 10 lakh and 4 per cent on SUVs. Jaitley also announced “infra cess” of 1 per cent on small petrol cars and 2.5 per cent on diesel cars.