New Delhi: Marginal tax relief of upto Rs6,600 for small tax payers, a 3 per cent hike in surcharge on super-rich, new levies on cars and SUVs and a compliance window to domestic black money holders were unveiled in the Budget for 2016-17 that envisages a huge spending of Rs 1.77 lakh crore in rural areas to address the agrarian distress.
Presenting his third Budget, Finance Minister Arun Jaitley made no changes in the personal or corporate income-tax slabs but made costlier several items including electricity, jewellery, readymade garments, mineral water and aerated drinks, tobacco and cigarettes by raising duties.
The Budget brought in a new 0.5 per cent Krishi Kalyan Cess on all taxable services to fund agriculture while proposing a retirement tax on 60 per cent of the pension and provident fund corpus including EPF created after April 1,
2016.
Against expectations of incentives for industry hit by global slowdown and shrinking exports, the Budget did not offer anything major.
While deciding to stick to to fiscal deficit roadmap, he unveiled a new policy for sale of PSUs to raise additional resources as well as tried to address lingering tax issues with one-time settlement offers.
While the revenue loss on direct taxes will be Rs 1060 crore, his indirect tax proposal will mobilise an additional Rs 20,670 crore. Net revenue gain will be Rs 19,610 crore.
Asked about comments that the Budget was left-of-centre, Jaitley said, "it is neither left nor right but deals with the reality of Indian economy. It addresses sectors which need highest priority and rural areas need most attention."
"There is a serious challenge, if not distress, in the rural sector and we have given priority to the social sector and infrastructure. This Budget is a combination of several things," he said.
Locally manufactured mobiles will become costlier by about 1 per cent because government has imposed duty on imported circuit boards used in them.
Availing of legal services through senior advocates or legal firms will cost more as such activity will no longer be exempted from service tax with Jaitley proposing a levy of 14 per cent.
Traveling by hiring air-conditioned stage carriage will also become more expensive as it will now come under service tax with a rate of 5.6 per cent.
Smart watches will also be dearer as they will now be subjected to retail sales price-based assessment of excise duty with an abatement of 35 per cent.
Hiring of agency to pack and move household items while shifting premises will also become expensive as it will now attract a service tax of 5.6 per cent as against 4.2 per cent earlier.
Imported golf cars will be dearer as customs duty on them has been hiked to 60 per cent from 10 per cent.
Lottery tickets will also become expensive as that will come in the service tax net, while imported e-reading devices will be dearer as it will now attract basic customs duty of 7.5 per cent as against nil earlier.
Other items that will become dearer include instruments for VoIP (Voice over Internet Protocol) and refined gold bars manufactured from gold dore bars.
On the other hand, footwear will become cheaper as excise duty on rubber sheets and resin rubber sheets for soles and heels have been cut to 6 per cent from 12.5 per cent. Solar lamps will also cost less as they have been exempted from excise duty. Earlier it was taxed at 12.5 per cent. Router, broadband modems and set top boxes will become cheaper as excise duty on these products have been reduced to 4 per cent without CENVAT credit from 12.5 per cent earlier.
Digital video recorder and CCTV cameras will also be cheaper as these items have been exempted from excise from 12.5 per cent earlier.
Hybrid electric vehicles are set to be cheaper as the engine will attract a lower excise duty of 6 per cent from 12.5 per cent earlier.
In order to bring down the cost of kidney dialysis of patients suffering from end-stage renal disease, excise duty on disposable sterilised dialyser from been reduced to NIL from 12.5 per cent earlier.
Microwave ovens made in the country will become cheaper as customs duty on a key imported component -- magnetron of capacity 1 KW to 1.5 KW -- has been brought down to NIL from 10 per cent earlier.
Sanitary pads napkins and tampons will also become cheaper as customs duties on key ingredients -- wood pulp and super absorbent polymer have been cut by 2.5 per cent. Braille paper will also be cheaper as it has been exempted from customs duty. It was earlier subjected to 10 per cent import duty.
Low cost houses will also become even more affordable as Jaitley did away with service tax on construction services on dwelling units not exceeding 60 square metres under Pradhan Mantri Awas Yojana and any housing scheme of state government.
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