Budget 2017-18 Finance Minister Speech download -Tax Reforms. Relief to small tax payers and other measures announced in the Budget

Budget 2017-18 Finance Minister Speech download -Tax Reforms. Relief to small tax payers and other measures announced in the Budget

Budget 2017-18 Finance Minister Speech-Tax Reforms

TAX REFORMS

Relief to small tax payers
Measures to boost growth and employment generation
Incentivising domestic value addition to help Make in India
Measures for moving towards a pensioned society
Measures for promoting affordable housing
Additional resource mobilization for agriculture, rural economy and clean environment
Reducing litigation and providing certainty in taxation
Simplification and rationalization of taxation
Use of Technology for creating accountability

Madam Speaker,

116. I shall now present my tax proposals

117. The Government acknowledges the role of taxpayers in nation building. Each rupee of tax contributes towards the Government’s efforts to provide better infrastructure, rural revival and social well-being. Taxation is a major tool available to Government for removing poverty and inequality from the society. The posterity will not forgive us if we do not use this opportunity in this perspective.

The thrust of my tax proposals this year falls in nine categories:-

(1) Relief to small tax payers.
(2) Measures to boost growth and employment generation.
(3) Incentivizing domestic value addition to help Make in India.
(4) Measures for moving towards a pensioned society.
(5) Measures for promoting affordable housing.
(6) Additional resource mobilization for agriculture, rural economy and clean environment.
(7) Reducing litigation and providing certainty in taxation.
(8) Simplification and rationalization of taxation.
(9) Use of Technology for creating accountability.

Relief to small tax payers

118. In order to lessen tax burden on individuals with income not exceeding `5 lakhs, I propose to raise the ceiling of tax rebate under section 87A from `2,000 to `5,000. There are 2 crore tax payers in this category who will get a relief of `3,000 in their tax liability.

119. The people who do not have any house of their own and also do not get any house rent allowance from any employer today get a deduction of `24,000 per annum from their income to compensate them for the rent they pay. I propose to increase the limit of deduction in respect of rent paid under section 80GG from `24,000 per annum to `60,000 per annum, which should provide relief to those who live in rented houses.

120. Presumptive taxation scheme under section 44AD of the Income Tax Act is available for small and medium enterprises i.e non corporate businesses with turnover or gross receipts not exceeding one crore rupees.

At present about 33 lakh small business people avail of this benefit, which frees them from the burden of maintaining detailed books of account and getting audit done. I propose to increase the turnover limit under this scheme to Rupees two crores which will bring big relief to a large number of assesses in the MSME category.

121. I also propose to extend the presumptive taxation scheme to professionals with gross receipts up to `50 lakh with the presumption of profit being 50% of the gross receipts.

Measures to boost growth and employment generation

122. I had, in my last budget speech mooted the proposal to reduce the rate of Corporate Tax from 30% to 25% over a period, accompanied by rationalization and removal of various tax exemptions and incentives. In any case the effective rate of tax paid by companies comes to an average of 24.67 % because of various exemptions which they are availing of. A phasing out plan of removing these exemptions and tax incentives was placed in public domain and we have received a large number of constructive suggestions. The final plan of phasing out exemptions is given in Annexure. The highlights are as follows:-

(a) The accelerated depreciation provided under IT Act will be limited to maximum 40% from 1.4.2017.
(b) The benefit of deductions for Research would be limited to 150% from 1.4.2017 and 100% from 1.4.2020.
(c) The benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020.
(d) The weighted deduction under section 35CCD for skill development will continue up to 1.4.2020

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