Tuesday 1 March 2016

Budget 2016-2017: Six key effects on the common man's wallet

In a Union Budget that clearly indicated a shift in focus to the rural economy, Finance Minister Arun Jaitley introduced a slew of taxes and cess to be imposed on services to help rural welfare programmes. 

 Islami Tijara takes a look at some of the highlights from the tax proposals in the Union Budget 2016-17.

1.      Income tax remains unchanged
Income tax slabs for the financial year 2016-17 has remained unchanged, the finance minister announced in the Parliament today.  


2.      House rent allowance cheer
Jaitley said that the tax exemption for house rent allowance will be raised to Rs 60,000 from the current Rs 24,000-level. The move is likely to bring in relief to the common man.

3.      Service tax
The government, in the Union Budget for 2016-17, decided to keep service tax rates unchanged at 14.5% (14% service tax + 0.5% Swacch Bharat Cess) Certain announcements also ensured there were some ‘taxing times’ ahead for the common man.

4.      Buying a car costlier now
An additional 1% tax on luxury cars above Rs 10 lakh was imposed by the Centre in the Union Budget today. The Centre also imposed an additional infrastructure cess of 1% on small petrol cars and a 2.5% cess on diesel cars. 

5.      Krishi Kalyan Tax
Jaitley announced a 5% tax on all taxable services under the Krishi Kalyan tax in a bid to benefit the farming community.

6.      Cigarettes to cost more
Excise duties on various tobacco products other than beedi have been raised by about 10 to 15%, Jaitley said in the Parliament. 


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