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Ab ki baar, tax ki maar?

CA Piyush Gupta 
on 04 March 2016

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Amidst all he hues cry ranging from  forced taxes on forced savings to increase in service tax by 0.5% in the name of Krishi Kalyan Cess to increase in excise duty on branded readymade garments, aren’t we doing injustice to such a reformist budget which after a long time focusses on farmers, poors, vulnerables and middle class janta ?

It is not that I am endorsing the hike in various taxes, a lot of them needs to be debated and should be rolled back if unjustified .

All the increases made in taxes has been given a proper explanation, take for example another increase in service tax in Modi regime from 12.36% to 15% was to brace ourselves for  implementation of much awaited GST whose rate shall lie between 18% to 20%. In fact, government has also increased ceiling limit for deducting Tax at source for various heads and reduces TDS rate for various heads.

I would like to present you  some points briefly with respect to tax related matters which are pro ‘aam janta’.

Benefit

Beneficiary

Rebate u/s 87A increased from Rs 2,000 to Rs 5,000

2 crores tax payers in this category

Deduction u/s 80GG increased from 24,000pa to Rs 60,000pa for employees who do not get House rent allowance

Salaried class employees

Benefit of presumptive taxation scheme u/s 44AD proposed to be increased from 1crores to 2 crores thus, reducing their burden of maintaining detailed accounts

33 lakhs small and medium enterprises

Benefit of presumptive taxation scheme  has been extended to professional services also with gross receipts of Rs 50 lakhs with the presumprion of profit being 50% of gross receipts

Small tax payers engaged in providing professional services

Corporate income tax rate has been reduced from 30% to 29%

Small companies with turnover not exceeding Rs 5 crores

Startups to get 100% deduction in profits for 3 out of 5 years set up during April 2016 to March 2019.

Small entrepreneurs

Period of holding for long term capital gain for unlisted company has been reduced from 3 years to 2 years

All taxpayers

NBFC’s shall be eligible for for deduction upto 5% in respect of provision for bad and doubtful debts

NBFC

Service tax on Annuity services provide by National Pension Scheme and EPFO to employees shall be exempted

Salaried Employees

Waiver of penal action for taxpayer with disputed amount upto Rs 10 lakhs upto date of Assessment Year

Small taxpayers


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