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Fourth year in the row and here comes our Finance Minister, with yet another Union Budget.
Post the demonetisation scheme at the end of previous year; all hopes were eyed on Budget 2017.
What was impressive about the budget was the inclination of the Finance Minister’s proposals towards the need of the small tax payers.
Let us quickly get a snippet of the Union Budget 2017 from an aam aadmi’s point of view:
Quick Snippet of the Union Budget 2017
Income Tax Slab
The income tax slab for the year 2017-18 will be as follows:
|Income slab||Tax rate (%)||Previous rates|
|0 – 2,50,000||NIL||NIL|
|2,50,000 – 5,00,000||5%||10%|
|5,00,000 – 10,00,000||20%||20%|
This implies that in case your total income amounts to Rs. 4,50,000/- (falling within the slab of Rs. 5,00,000) and taxable income reduces to Rs. 3,00,000 after deductions.
Then the amount payable will be Rs. NIL
|Less: Deductions under section 80C etc||1,50,000|
|Upto 2,50,000 — NIL|
|2,50,000 – 5,00,000 —||50,000 * 5% = 2500|
|Less: Rebate under section 87A||2500|
Rebate under section 87A
The rebate under Section 87A is reduced from Rs. 5000 to Rs. 2500 for the tax payers having a taxable income upto Rs. 3,50,000 which was 5,00,000/- previously.
Now the catch lies in the fact that on one side tax rate has been reducing and on another hand, the rebate under section 87A has been reduced.
This basically means that up to Rs. 3, 00,000 taxations will be NIL.
Also, a simple tax return form will be initiated for these slab taxpayers.
Assessee’s having a taxable income of Rs. 50,00,000 up to Rs. 1 crore will be charged with an additional surcharge of 10%.
This implies that the amount of tax payable will be increased as compared to the previous slab.
You can also read: Gentle Reminder – Investment is not a mere Tool for Tax Saving
National Pension Scheme
Previously on a closure of the NPS account, a pensioner was exempted up to 40% of the total amount receivable by him.
Post budget, exemption for partial withdrawal has been introduced for the amount not exceeding 25% of the amount contributed by the employee.
Also, a self-employed individual will be able to contribute up to 20 percent of the total income and save more for future.
Small and medium-sized enterprises (SMEs)
SMEs are those companies whose gross turnover does not exceed Rs. 50 crore.
In the previous budget, the Finance Minister has proposed to provide further relief to such small enterprises.
Maintaining his promise, he has reduced the tax rate to 25% this year.
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No relief has been granted to big organizations. The tax rates remain unchanged from previous year.
An attempt has been made by the Government to curb down anomalies in the economy.
Taxing the super-rich is guessed to be in the mind of the Finance Minister while preparing this budget.
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