Tax reforms in mind, government abolishes 13 cess -Governance Now

Tax reforms in mind, government abolishes 13 cess

The budget 2016 proposes steps to rationalise TDS provisions for income tax and to improve cash flow position of small tax payers

GN Bureau | February 29, 2016

#tax reform #arun jaitley #budget 2016

While presenting the general Budget 2016-17 in Lok Sabha, finance minister Arun Jaitley said that the government has already accepted many recommendations of the Tax Administration Reform Committee. He further proposed to accept a number of recommendations of Justice Easwar Committee in Budget 2016-17.

Highlighting that taxation is a major tool available to government for removing poverty and inequality, Jaitley said that it has to be exercised cautiously. In a major initiative aimed at small tax payers, the finance minister proposed to reduce multiplicity of taxes and associated cascading. He also proposed reduction in cost of tax collection and abolition 13 cesses levied by various ministries in which revenue collection is less than Rs 50 crore in a year.

The finance minister proposed to raise the ceiling of tax rebate under Section 87A of IT Act to Rs 5,000 from Rs 2,000 for individuals with income less than Rs 5 lakh. He said that above 2 crore tax payers would get a relief of Rs 3,000. The limit of deduction of house rent paid under section 80GG has also been raised to Rs 60,000 from the existing Rs 24,000 per annum to give relief to employees who live in rented houses.

Under the presumptive taxation scheme under Section 44AD of the Income tax Act, the limit of turnover or gross receipts has been raised to two crore rupees from the exiting one crore rupees to benefit about 33 lakh small business people. It frees a large number of such assesses in the MSME category from the burden of maintaining detailed books of account and getting audit done. The presumptive taxation scheme is to be now extended to professionals with gross receipts up to Rs 50 lakh with the presumption of profit being 50 percent of the gross receipts.

The minister also said that his ministry has proposed steps to rationalise TDS provisions for income tax and to improve cash flow position of small tax payers who get their funds blocked due to current TDS provisions. He also, pointed out that non-residents without PAN are currently subjected to a higher rate of TDS. “The amendment to relevant provision will allow that on furnishing of alternative documents, such higher rate will not apply,” he said.

According to the finance ministry release, the facility for revision of return hitherto available to service tax assesses only will be extended to central excise assesses also.

The budget also proposed additional options for reversal of input tax credits with respect to non-taxable services provided by banking companies and financial institutions, including NBFCs, by way of extending deposits, loans and advances.

The minister further informed that the government has taken steps to reduce the cargo release time and transaction costs of EXIM trade and proposed to amend the Customs Act so as to provide for deferred payment of customs duties for importers and exporters with proven track record.

Comments

Other News

Report of India’s G20 Task Force on Digital Public Infrastructure released

The final ‘Report of India’s G20 Task Force on Digital Public Infrastructure’ by ‘India’s G20 Task Force on Digital Public Infrastructure for Economic Transformation, Financial Inclusion and Development’ was released in New Delhi on Monday. The Task Force was led by the

How the Great War of Mahabharata was actually a world war

Mahabharata: A World War By Gaurang Damani Sanganak Prakashan, 317 pages, Rs 300 Gaurang Damani, a Mumbai-based el

Budget expectations, from job creation to tax reforms…

With the return of the NDA to power in the recently concluded Lok Sabha elections, all eyes are now on finance minister Nirmala Sitharaman’s full budget for the FY 2024-25. The interim budget presented in February was a typical vote-on-accounts, allowing the outgoing government to manage expenses in

How to transform rural landscapes, design 5G intelligent villages

Futuristic technologies such as 5G are already here. While urban users are reaping their benefits, these technologies also have a potential to transform rural areas. How to unleash that potential is the question. That was the focus of a workshop – “Transforming Rural Landscape:

PM Modi visits Rosatom Pavilion at VDNKh in Moscow

Prime minister Narendra Modi, accompanied by president Vladimir Putin, visited the All Russian Exhibition Centre, VDNKh, in Moscow Tuesday. The two leaders toured the Rosatom Pavilion at VDNKh. The Rosatom pavilion, inaugurated in November 2023, is one of the largest exhibitions on the histo

Let us pledge to do what we can for environment: President

President Droupadi Murmu on Monday morning spent some time at the sea beach of the holy city of Puri, a day after participating in the annual Rath Yatra. Later she penned her thoughts about the experience of being in close commune with nature. In a message posted on X, she said: