Substantial increase in states shares in central tax collections, social security net for the poorest of poor, rationalization of corporate tax structure and incentivizing investments in the infrastructure sector are the biggest takeaways in the budget presented by the finance minister Arun Jaitely on Saturday.
Adopting a cautious approach by refraining from making big bang announcements, his budget is focused on the promises his party made in enhancing investments in rural sector, tackling the black money issue and rationalization of the tax structure.
He announced stringent law for black money and benami property transaction which includes imprisonment upto 10 years. Also it would be mandatory to submit PAN number for purchases above Rs 100,000. He announced abolition of wealth tax and instead decided to impose 2 per cent surcharge on income above Rs 1 crore. Declaration of assets would now have to be made in IT returns instead of wealth returns.
According to the FM, the deductions allowed by the budget in could exempt income upto Rs 4,44,000 from tax.
Jaitely was hopeful that the economy is on a double digit growth trajectory and the world is looking india with great hope and expectations. In order to ease the tensions arising out of GARR imposed during the UPA rule, he said it would be applicable only on prospective basis and from 2017. He also clarified that offshore funds can operate from India without be doubly taxed.
Corporate tax he said would be reduced to 25 per cent in four years.
Amit Goel, Business Editor