Small taxpayers get relief; focus on value addition and job creation
29 Feb 2016
Stating that taxation is a major tool available to government for removing poverty and inequality from society, finance minister Arun Jaitley proposed to raise the ceiling of tax rebate under section 87A from Rs2,000 to Rs5,000. With this, individuals having income up to Rs5 lakh will get a relief of Rs3,000 in their tax liability.
He also proposed to increase the limit of deduction of rent paid under section 80 GG from Rs24,000 per annum to Rs60,000 to provide relief to those who live in rented houses.
Jaitley listed nine thrust areas in his tax proposals, including relief to small tax payers, measures to boost growth and employment generation, incentivising domestic value addition to help `Make in India', for moving towards a pensioned society, for promoting affordable housing, additional resource mobilisation for agriculture, rural economy and clean environment, reducing litigation and providing certainty in taxation, simplification and rationalisation of taxation and use of technology for creating accountability.
The finance minister proposed to increase the turnover limit under presumptive taxation scheme under section 44 AD of the Income Tax Act to Rs2 crore from the existing limit of Rs1 crore, which will benefit more than 3 million small business people. He also proposed to extend the presumptive taxation scheme with profit deemed to be 50 per cent, to professionals with gross receipts up to Rs50 lakh.
Announcing measures to boost growth and employment generation, Jaitley said the accelerated depreciation provided under I-T Act will be limited to maximum 40 per cent from 1 April 2017.
The benefit of deductions for research would be limited to 150 per cent from 1April 2017 and 100 per cent from 1 April 2020.
Distributive justice
- Raise the ceiling of tax rebate under section 87A from Rs2,000 to Rs5,000 to lessen tax burden on individuals with income up to Rs5 lakh.
- Increase the limit of deduction of rent paid under section 80GG from Rs24,000 per annum to Rs60,000, to provide relief to those who live in rented houses.
- Increase the turnover limit under presumptive taxation scheme under section 44AD of the Income Tax Act to Rs2 crore to bring big relief to a large number of assessees in the MSME category.
Extend the presumptive taxation scheme with profit deemed to be 50 per cent, to professionals with gross receipts up to Rs50 lakh.
