Ministry of Finance

HIGHLIGHTS OF THE UNION BUDGET 2022-23

01 FEB 2022

The Union Budget seeks to complement macro-economic level growth with a focus on micro-economic level all inclusive welfare. The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman tabled the Union Budget 2022-23 in Parliament today.

The key highlights of the budget are as follows:

PART A

• India’s economic growth estimated at 9.2% to be the highest among all large economies.
• 60 lakh new jobs to be created under the productivity linked incentive scheme in 14 sectors.
• PLI Schemes have the potential to create an additional production of Rs 30 lakh crore.
• Entering Amrit Kaal, the 25 year long lead up to India @100, the budget provides impetus for growth along four priorities:

• PM GatiShakti
• Inclusive Development
• Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action.
• Financing of investments

PM GatiShakti

• The seven engines that drive PM GatiShakti are Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure.

PM GatiShkati National Master Plan

• The scope of PM GatiShakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency.
• The projects pertaining to these 7 engines in the National Infrastructure Pipeline will be aligned with PM GatiShakti framework.

Road Transport

• National Highways Network to be expanded by 25000 Km in 2022-23.
• Rs 20000 Crore to be mobilized for National Highways Network expansion.

Multimodal Logistics Parks

• Contracts to be awarded through PPP mode in 2022-23 for implementation of Multimodal Logistics Parks at four locations.

Railways

• One Station One Product concept to help local businesses & supply chains.
• 2000 Km of railway network to be brought under Kavach, the indigenous world class technology and capacity augmentation in 2022-23.
• 400 new generation Vande Bharat Trains to be manufactured during the next three years.
• 100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the next three years.

Parvatmala

• National Ropeways Development Program, Parvatmala to be taken up on PPP mode.
• Contracts to be awarded in 2022-23 for 8 ropeway projects of 60 Km length.

Inclusive Development

Agriculture

• Rs. 2.37 lakh crore direct payment to 1.63 crore farmers for procurement of wheat and paddy.
• Chemical free Natural farming to be promoted throughout the county. Initial focus is on farmer’s lands in 5 Km wide corridors along river Ganga.
• NABARD to facilitate fund with blended capital to finance startups for agriculture & rural enterprise.
• ‘Kisan Drones’ for crop assessment, digitization of land records, spraying of insecticides and nutrients.

Ken Betwa project

• 1400 crore outlay for implementation of the Ken – Betwa link project.
• 9.08 lakh hectares of farmers’ lands to receive irrigation benefits by Ken-Betwa link project.

MSME

• Udyam, e-shram, NCS and ASEEM portals to be interlinked.
• 130 lakh MSMEs provided additional credit under Emergency Credit Linked Guarantee Scheme (ECLGS)
• ECLGS to be extended up to March 2023.
• Guarantee cover under ECLGS to be expanded by Rs 50000 Crore to total cover of Rs 5 Lakh Crore.
• Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
• Raising and Accelerating MSME performance (RAMP) programme with outlay of Rs 6000 Crore to be rolled out.

Skill Development

• Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched to empower citizens to skill, reskill or upskill through on-line training.
• Startups will be promoted to facilitate ‘Drone Shakti’ and for Drone-As-A-Service (DrAAS).

Education

• ‘One class-One TV channel’ programme of PM eVIDYA to be expanded to 200 TV channels.
• Virtual labs and skilling e-labs to be set up to promote critical thinking skills and simulated learning environment.
• High-quality e-content will be developed for delivery through Digital Teachers.
• Digital University for world-class quality universal education with personalised learning experience to be established.

Health

• An open platform for National Digital Health Ecosystem to be rolled out.
• ‘National Tele Mental Health Programme’ for quality mental health counselling and care services to be launched.
• A network of 23 tele-mental health centres of excellence will be set up, with NIMHANS being the nodal centre and International Institute of Information Technology-Bangalore (IIITB) providing technology support.

Saksham Anganwadi

• Integrated benefits to women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0.
• Two lakh anganwadis to be upgraded to Saksham Anganwadis.

Har Ghar, Nal Se Jal

• Rs. 60,000 crore allocated to cover 3.8 crore households in 2022-23 under Har Ghar, Nal se Jal.

Housing for All

• Rs. 48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM Awas Yojana.

Prime Minister’s Development Initiative for North-East Region (PM-DevINE)

• New scheme PM-DevINE launched to fund infrastructure and social development projects in the North-East.
• An initial allocation of Rs. 1,500 crore made to enable livelihood activities for youth and women under the scheme.

Vibrant Villages Programme

• Vibrant Villages Programme for development of Border villages with sparse population, limited connectivity and infrastructure on the northern border.

Banking

• 100 per cent of 1.5 lakh post offices to come on the core banking system.
• Scheduled Commercial Banks to set up 75 Digital Banking Units (DBUs) in 75 districts.

e-Passport

• e-Passports with embedded chip and futuristic technology to be rolled out.

Urban Planning

• Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented.
• Battery swapping policy to be brought out for setting up charging stations at scale in urban areas.

Land Records Management

• Unique Land Parcel Identification Number for IT-based management of land records.

Accelerated Corporate Exit

• Centre for Processing Accelerated Corporate Exit (C-PACE) to be established for speedy winding-up of companies.

AVGC Promotion Task Force

• An animation, visual effects, gaming, and comic (AVGC) promotion task force to be set-up to realize the potential of this sector.

Telecom Sector

• Scheme for design-led manufacturing to be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme.

Export Promotion

• Special Economic Zones Act to be replaced with a new legislation to enable States to become partners in ‘Development of Enterprise and Service Hubs’.

AtmaNirbharta in Defence:

• 68% of capital procurement budget earmarked for domestic industry in 2022-23, up from 58% in 2021-22.
• Defence R&D to be opened up for industry, startups and academia with 25% of defence R&D budget earmarked.
• Independent nodal umbrella body to be set up for meeting testing and certification requirements.

Sunrise Opportunities

• Government contribution to be provided for R&D in Sunrise Opportunities like Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems.

Energy Transition and Climate Action:

• Additional allocation of Rs. 19,500 crore for Production Linked Incentive for manufacture of high efficiency solar modules to meet the goal of 280 GW of installed solar power by 2030.
• Five to seven per cent biomass pellets to be co-fired in thermal power plants:
  • CO2 savings of 38 MMT annually,
  • Extra income to farmers and job opportunities to locals,
  • Help avoid stubble burning in agriculture fields.
• Four pilot projects to be set up for coal gasification and conversion of coal into chemicals for the industry
• Financial support to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to take up agro-forestry.

Public Capital Investment:

• Public investment to continue to pump-prime private investment and demand in 2022-23.
  • Outlay for capital expenditure stepped up sharply by 35.4% to Rs. 7.50 lakh crore in 2022-23 from Rs. 5.54 lakh crore in the current year.
  • Outlay in 2022-23 to be 2.9% of GDP.
• ‘Effective Capital Expenditure’ of Central Government estimated at Rs. 10.68 lakh crore in 2022-23, which is about 4.1% of GDP.

GIFT-IFSC

• World-class foreign universities and institutions to be allowed in the GIFT City.
• An International Arbitration Centre to be set up for timely settlement of disputes under international jurisprudence.

Mobilising Resources

• Data Centres and Energy Storage Systems to be given infrastructure status.
• Venture Capital and Private Equity invested more than Rs. 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystem. Measures to be taken to help scale up this investment.
• Blended funds to be promoted for sunrise sectors.
• Sovereign Green Bonds to be issued for mobilizing resources for green infrastructure.

Digital Rupee

• Introduction of Digital Rupee by the Reserve Bank of India starting 2022-23.

Providing Greater Fiscal Space to States

• Enhanced outlay for ‘Scheme for Financial Assistance to States for Capital Investment’:
• From Rs. 10,000 crore in Budget Estimates to Rs. 15,000 crore in Revised Estimates for current year
• · Allocation of Rs. 1 lakh crore in 2022-23 to assist the states in catalysing overall investments in the economy: fifty-year interest free loans, over and above normal borrowings
• In 2022-23, States will be allowed a fiscal deficit of 4% of GSDP, of which 0.5% will be tied to power sector reforms

Fiscal Management

• Budget Estimates 2021-22: Rs. 34.83 lakh crore
  • Revised Estimates 2021-22: Rs. 37.70 lakh crore
  • otal expenditure in 2022-23 estimated at Rs. 39.45 lakh crore
  • Total receipts other than borrowings in 2022-23 estimated at Rs. 22.84 lakh crore
  • Fiscal deficit in current year: 6.9% of GDP (against 6.8% in Budget Estimates)
• Fiscal deficit in 2022-23 estimated at 6.4% of GDP

PART B

DIRECT TAXES

To take forward the policy of stable and predictable tax regime:

• Vision to establish a trustworthy tax regime.
• To further simplify tax system and reduce litigation.

Introducing new ‘Updated return’

• Provision to file an Updated Return on payment of additional tax.
• Will enable the assessee to declare income missed out earlier.
• Can be filed within two years from the end of the relevant assessment year.

Cooperative societies

• Alternate Minimum Tax paid by cooperatives brought down from 18.5 per cent to 15 per cent.
• To provide a level playing field between cooperative societies and companies.
• Surcharge on cooperative societies reduced from 12 per cent to 7 per cent for those having total income of more than Rs 1 crore and up to Rs 10 crores.

Tax relief to persons with disability

• Payment of annuity and lump sum amount from insurance scheme to be allowed to differently abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardian attaining the age of 60 years.

Parity in National Pension Scheme Contribution

• Tax deduction limit increased from 10 per cent to 14 per cent on employer’s contribution to the NPS account of State Government employees.
• Brings them at par with central government employees.
• Would help in enhancing social security benefits.

Incentives for Start-ups

• Period of incorporation extended by one year, up to 31.03.2023 for eligible start-ups to avail tax benefit.
• Previously the period of incorporation valid up to 31.03.2022.

Incentives under concessional tax regime

• Last date for commencement of manufacturing or production under section 115BAB extended by one year i.e. from 31st March, 2023 to 31st March, 2024.

Scheme for taxation of virtual digital assets

• Specific tax regime for virtual digital assets introduced.
• Any income from transfer of any virtual digital asset to be taxed at the rate of 30 per cent.
• No deduction in respect of any expenditure or allowance to be allowed while computing such income except cost of acquisition.
• Loss from transfer of virtual digital asset cannot be set off against any other income.
• To capture the transaction details, TDS to be provided on payment made in relation to transfer of virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold.
• Gift of virtual digital asset also to be taxed in the hands of the recipient.

Litigation Management

• In cases where question of law is identical to the one pending in High Court or Supreme Court, the filing of appeal by the department shall be deferred till such question of law is decided by the court.
• To greatly help in reducing repeated litigation between taxpayers and the department.

Tax incentives to IFSC

• Subject to specified conditions, the following to be exempt from tax
• Income of a non-resident from offshore derivative instruments.
• Income from over the counter derivatives issued by an offshore banking unit.
• Income from royalty and interest on account of lease of ship.
• Income received from portfolio management services in IFSC.

Rationalization of Surcharge

• Surcharge on AOPs (consortium formed to execute a contract) capped at 15 per cent.
• Done to reduce the disparity in surcharge between individual companies and AOPs.
• Surcharge on long term capital gains arising on transfer of any type of assets capped at 15 per cent.
• To give a boost to the start up community.

Health and Education Cess

• Any surcharge or cess on income and profits not allowable as business expenditure.

Deterrence against tax-evasion

• No set off, of any loss to be allowed against undisclosed income detected during search and survey operations.

Rationalizing TDS Provisions

• Benefits passed on to agents as business promotion strategy taxable in hands of agents.
• Tax deduction provided to person giving benefits, if the aggregate value of such benefits exceeds Rs 20,000 during the financial year.

INDIRECT TAXES

Remarkable progress in GST

• GST revenues are buoyant despite the pandemic – Taxpayers deserve applause for this growth.

Special Economic Zones

• Customs Administration of SEZs to be fully IT-driven and function on the Customs National Portal – shall be implemented by 30th September 2022.

Customs Reforms and duty rate changes

• Faceless Customs has been fully established. During Covid-19 pandemic, Customs formations have done exceptional frontline work against all odds displaying agility and purpose.

Project imports and capital goods

• Gradually phasing out of the concessional rates in capital goods and project imports; and applying a moderate tariff of 7.5 percent – conducive to the growth of domestic sector and ‘Make in India’.
• Certain exemptions for advanced machineries that are not manufactured within the country shall continue.
• A few exemptions introduced on inputs, like specialised castings, ball screw and linear motion guide – to encourage domestic manufacturing of capital goods.

Review of customs exemptions and tariff simplification

• More than 350 exemption entries proposed to be gradually phased out, like exemption on certain agricultural produce, chemicals, fabrics, medical devices, & drugs and medicines for which sufficient domestic capacity exists.
• Simplifying the Customs rate and tariff structure particularly for sectors like chemicals, textiles and metals and minimise disputes; Removal of exemption on items which are or can be manufactured in India and providing concessional duties on raw material that go into manufacturing of intermediate products – in line with the objective of ‘Make in India’ and ‘Atmanirbhar Bharat’.

Sector specific proposals

Electronics

• Customs duty rates to be calibrated to provide a graded rate structure – to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters.
• Duty concessions to parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items – To enable domestic manufacturing of high growth electronic items.

Gems and Jewellery

• Customs duty on cut and polished diamonds and gemstones being reduced to 5 per cent; Nil customs duty to simply sawn diamond – To give a boost to the Gems and Jewellery sector
• A simplified regulatory framework to be implemented by June this year – To facilitate export of jewellery through e-commerce.
• Customs duty of at least Rs 400 per Kg to be paid on imitation jewellery import – To disincentivise import of undervalued imitation jewellery.

Chemicals

Customs duty on certain critical chemicals namely methanol, acetic acid and heavy feed stocks for petroleum refining being reduced; Duty is being raised on sodium cyanide for which adequate domestic capacity exists – This will help in enhancing domestic value addition.

MSME

• Customs duty on umbrellas being raised to 20 per cent. Exemption to parts of umbrellas being withdrawn.
• Exemption being rationalised on implements and tools for agri-sector which are manufactured in India
• Customs duty exemption given to steel scrap last year extended for another year to provide relief to MSME secondary steel producers
• Certain Anti- dumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel are being revoked – to tackle prevailing high prices of metal in larger public interest.

Exports

• To incentivise exports, exemptions being provided on items such as embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes.
• Duty being reduced on certain inputs required for shrimp aquaculture – to promote its exports.

Tariff measure to encourage blending of fuel

Unblended fuel to attract an additional differential excise duty of Rs 2/ litre from the 1st of October 2022 – to encourage blending of fuel.

PIB

The post UNION BUDGET 2022-2023 HIGHLIGHTS – PIB appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

Union Budget for the financial year 2018-19, presented by the Finance Minister Shri Arun Jaitley in the Parliament today, envisaged a total outlay of Rs. 24,42,213 crore. Out of this, Rs 2,95,511.41 crore has been earmarked for Defence. This accounts for 12.10 percent of the total Central Government expenditure for the year 2018-19.

The allocation of Rs. 2,95,511.41 crore represents a growth of 7.81 percent over Budget Estimates (Rs. 2,74,114.12 crore) and 5.91 percent over Revised Estimates (Rs. 2,79,003.85 crore), respectively for the financial year 2017-18.

Out of Rs. 2,95,511.41 crore allocated for the financial year 2018-19, Rs. 1,95,947.55 crore has been allocated for Revenue (Net) expenditure and Rs. 99,563.86 crore for Capital expenditure for the Defence Services and the Organizations/ Departments under Ministry of Defence. The amount of Rs. 99,563.86 crore, allocated for Capital expenditure, includes modernization related expenditure. The Capital allocation for Ministry of Defence under BE 2018-19 is 33.1 percent of the total Central Government Expenditure on Capital Account, which is Rs 3,00,441 crore.

For Defence Pension, which is over and above the outlay mentioned above, an amount of Rs. 1,08,853.30 crore has been provided in BE 2018-19. This is 26.60 percent above the BE 2017-18 of Rs. 85,740 crore and 14.26 percent over RE 2017-18 of Rs. 95,000 crore.

The approval for the construction of Sela pass has given further impetus to the Defence preparedness.

Source: PIB

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• Finance Minister Shri Arun Jaitley presents general Budget 2018-19 in Parliament.
• Budget guided by mission to strengthen agriculture, rural development, health,
  education, employment, MSME and infrastructure sectors
• Government says, a series of structural reforms will propel India among the fastest growing economies of the world. Country firmly on course to achieve
  over 8 % growth as manufacturing, services and exports back on good
  growth path.
• MSP for all unannounced kharif crops will be one and half times of their production cost like majority of rabi crops: Institutional Farm Credit raised to 11 lakh crore in 2018-19 from 8.5 lakh crore in 2014-15.
• 22,000 rural haats to be developed and upgraded into Gramin Agricultural
  Markets to protect the interests of 86% small and marginal farmers.
• “Operation Greens” launched to address price fluctuations in potato, tomato and onion for benefit of farmers and consumers.
• Two New Funds of Rs10,000 crore announced for Fisheries and Animal Husbandary sectors; Re-structured National Bamboo Mission gets Rs.1290 crore.
• Loans to Women Self Help Groups will increase to Rs.75,000 crore in 2019 from 42,500 crore last year.
• Higher targets for Ujjwala, Saubhagya and Swachh Mission to cater to lower and
  middle class in providing free LPG connections, electricity and toilets.
• Outlay on health, education and social protection will be 1.38 lakh crore. Tribal students to get Ekalavya Residential School in each tribal block by 2022. Welfare fund for SCs gets a boost.
• World’s largest Health Protection Scheme covering over 10 crore poor and
  vulnerable families launched with a family limit upto 5 lakh rupees for
  secondary and tertiary treatment.
• Fiscal Deficit pegged at 3.5 %, projected at 3.3 % for 2018-19.. Rs. 5.97 lakh crore allocation for infrastructure
  
  
• Ten prominent sites to be developed as Iconic tourist destinations
• NITI Aayog to initiate a national programme on Artificial Intelligence(AI)
• Centres of excellence to be set up on robotics, AI, Internet of things etc
• Disinvestment crossed target of Rs 72,500 crore to reach Rs 1,00,000 crore.
• Comprehensive Gold Policy on the anvil to develop yellow metal as an asset class
• 100 percent deduction proposed to companies registered as Farmer Producer Companies with an annual turnover upto Rs. 100 crore on profit derived from such activities, for five years from 2018-19.
• Deduction of 30 percent on emoluments paid to new employees Under Section 80-JJAA to be relaxed to 150 days for footwear and leather industry, to create more employment.
• No adjustment in respect of transactions in immovable property where
  Circle Rate value does not exceed 5 percent of consideration.
• Proposal to extend reduced rate of 25 percent currently available for companies
  with turnover of less than 50 crore (in Financial Year 2015-16), to
  companies reporting turnover up to Rs. 250 crore in Financial Year
  2016-17, to benefit micro, small and medium enterprises.
• Standard Deduction of Rs. 40,000 in place of present exemption for transport
  allowance and reimbursement of miscellaneous medical expenses. 2.5 crore
  salaried employees and pensioners to benefit.
• Relief to Senior Citizens proposed:
  • Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.
  • TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit
    schemes.
  • Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D.
  • Increase in deduction limit for medical expenditure for certain critical illness from Rs. 60,000 (in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 1 lakh for all senior citizens, under section 80DDB.
  • Proposed to extend Pradhan Mantri Vaya Vandana Yojana up to March, 2020. Current investment limit proposed to be increased to Rs. 15 lakh from the existing limit of Rs. 7.5 lakh per senior citizen.
    
• More concessions for International Financial Services Centre (IFSC), to promote trade in stock exchanges located in IFSC.
• To control cash economy, payments exceeding Rs. 10,000 in cash made by
  trusts and institutions to be disallowed and would be subject to tax.
• Tax on Long Term Capital Gains exceeding Rs. 1 lakh at the rate of 10
  percent, without allowing any indexation benefit. However, all gains up
  to 31st January, 2018 will be grandfathered.
• Proposal to introduce tax on distributed income by equity oriented mutual funds at the rate of 10 percent.
• Proposal to increase cess on personal income tax and corporation tax to 4 percent from present 3 percent.
• Proposal to roll out E-assessment across the country to almost eliminate person
  to person contact leading to greater efficiency and transparency in
  direct tax collection.
• Proposed changes in customs duty to promote creation of more jobs in the country and also to incentivise domestic value addition and Make in India in sectors such as food processing, electronics, auto components, footwear and furniture.

Source: PIB

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With some tinkering in the income tax rates for 2017-18, Finance Minister Arun Jaitley reduced the tax rate for income between Rs. 2.5 lakh and Rs. 5 lakh to 5 per cent in the Union Budget, while adding a surcharge of 10 per cent on tax for income between Rs. 50 lakh and Rs. 1 crore.

Although the basic income tax exemption limit remains the same at Rs. 2.5 lakh, there are many exemptions available in the Income Tax Act, which can substantially reduce your tax liability.

One needs to plan from the beginning of the next financial year to take maximum benefit of the income tax deductions available.

Here are the new income tax slabs for taxpayers:

Here are the some of the deductions available for FY2017-18: 

House Rent Allowance under Section 10 (13A) of the Income Tax Act

House Rent Allowance, commonly known as HRA, makes up a major chunk of a salaried individual’s total pay. HRA is partly exempted from tax. If you are staying in your own house or not paying any rent, your HRA will be completely taxable. However, those who stay with their parents can also claim HRA benefits by paying rent to their parents.

The amount which is allowed for exemption under HRA is calculated as minimum of:

1) Rent paid annually minus 10 per cent of basic salary plus dearness allowance

2) Actual HRA received

3) 40 per cent of basic and dearness allowance (50 per cent in case of metro cities)

Deductions under Section 80C

Section 80C of the Income Tax Act provides various provisions under which an individual can get deduction benefits up to Rs. 1.5 lakh. Employees’ Provident Fund (EPF), Public Provident Fund (PPF), Sukanya Samriddhi Account, National Savings Certificate and tax-saving fixed deposits are some of the investment options that offer benefits under Section 80C. The premium paid for life insurance plans, National Pension Scheme (NPS) and tax-saving mutual funds (ELSS) also qualify for deduction under Section 80C.

Further, one can claim tuition fees paid for up to two children, principal repayment on home loan, stamp duty and registration cost on the house bought as deduction under Section 80C.

Deductions under Section 80CCD(1B)

Introduced in Budget 2015-16, Section 80CCD (1B) provides deduction up to Rs. 50,000 for investment in NPS Tier 1 account. This deduction is over and above the deduction available in Section 80C. An individual in 30 per cent tax bracket can save up to Rs. 15,450 of tax by investing Rs. 50,000 in NPS.

Deduction of interest on housing loan (Section 24B)

Buying a house is among several other things an individual wants to do during his or her lifetime. The income tax rules also incentivise the same. Under Section 24B of the Income Tax Act, interest paid up to Rs. 2 lakh on housing loan and up to Rs. 30,000 on home improvement loan is allowable as deduction from your taxable income.

The government has however cut down tax benefits borrowers enjoyed on properties let out on rent. As per current tax laws, for properties rented out, a borrower could deduct the entire interest paid on home loan after adjusting for the rental income. On the other hand, borrowers of self-occupied properties get Rs. 2 lakh deduction on interest repayment on home loan.

However, according to the proposed change in Budget 2017, on rented properties, the borrower can only claim deduction of up to Rs. 2 lakh per year after adjusting for the rental income. And the amount above Rs. 2 lakh can be carried forward for eight assessment years.

Since the interest component of home loan repaid in initial years is higher, experts say that the borrower may not be able to fully adjust the interest paid as deduction even in subsequent years.

Deduction under Section 80EE

Under Section 80EE, an additional deduction of Rs. 50,000 is available over and above the limit of Section 24B on interest paid on home loans if the person is buying a house for the first time (the person must not own any other residential property on the date of sanction of loan). However, to avail the benefit of this section the value of the property must be below Rs. 50 lakh and the loan amount should not exceed Rs. 35 lakh. Further, the property must be bought after April 1, 2016.
Deduction under Section 80D

Premium paid for medical/health insurance for self, spouse, children and parents qualify for deduction under this Section. On can claim deduction of Rs. 25,000, if he is below 60 years of age, and Rs. 30,000 if he is above 60 years of age, towards medical insurance premium paid for self, spouse and children. Further, additional deduction of Rs. 25,000 is available if one has bought medical insurance for his parents. This deduction can go up to Rs. 30,000 if parents are above the age of 60 years.
Deduction under Section 80DD

If a tax payer has dependent parents, spouse, children or siblings who are differently-abled, then he can claim deductions up to Rs. 75,000 for expenses on their maintenance and medical treatment under this section. This deduction can increase to Rs. 1.25 lakh in case of severe disability.
Deduction under Section 80DDB

Under this section, one can claim deduction of Rs. 40,000 for treatment of certain diseases for self and dependents. The deduction can go up to Rs. 60,000 if the tax payer is above 60 years of age and if he is above 80 years of age, then the deduction amount is up to Rs. 80,000.
Deduction under Section 80E

According to the provisions of Section 80E, a taxpayer can claim deduction for interest paid on education loan for him, spouse or children. There is no upper limit on the amount of deduction. However, the loan must have been taken from a financial institutional or approved charitable institution and for full-time higher education.

Source: NDTV

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New Delhi: Most services are likely to attract a tax of 18 percent under the Goods and Services Tax (GST) as Union Finance Minister Arun Jaitley presents the Union Budget on February 1.
It will be interesting to witness whether the Centre raises the service tax rate from the existing 15 percent by at least one percentage point to 16 percent as a precursor to the rollout of GST.

However, the Centre and states have agreed to rollout GST from July 1, 2017, after which most services will turn costlier.

Also, a higher service tax, even for three months, will help the Centre partially offset the revenue loss after the GST kicks in, sources indicated.

Under GST, the service tax collections will be divided equally between the Centre and the states. A service tax closer to the GST rate will also help consumers avoid a greater price shock after the new system is rolled out.

Jaitley-headed GST Council has agreed on a four-slab structure -5, 12, 18 and 28 percent-along with a cess on luxury and ‘sin’ goods such as tobacco.

Within these, two standard rates of 12 percent and 18 percent could extend to a majority of the taxable goods.

ANI

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New Delhi: In a major overhaul, the Cabinet today approved advancing presentation of the annual Budget by a month, scrapped over nine decade old tradition of having a separate Railway Budget and removed classifications for expenditure to make the exercise simpler.

With a view to get all the legislative approvals for the annual spending and tax proposals before the beginning of the new financial year on April 1, the Cabinet headed by Prime Minister Narendra Modi approved advancing date for presentation of the General Budget by a month instead of present practice of unveiling it at the end of February.

The Cabinet also approved merging Railway Budget with the general Budget and doing away with distinction of plan and non plan expenditure, officials said.

To facilitate this, the Budget Session of parliament will be called sometime before January 25, a month ahead of the current practice.

Accordingly, the beginning of budget preparation will be advanced to early October and GDP estimates made available on January 7 instead of February 7 now.

Till now Budget was presented on the last day of February and it is not until mid-May that the Parliament approves it in two parts. And with the monsoon arriving in June, most of the schemes and spendings by states do not take off until October, leaving just half a year for their implementation.

Early presentation of Budget would mean that the entire exercise is over by March 31, and expenditure as well as tax proposals come into effect right from the beginning of new fiscal, thereby ensuring better implementation.

Also, the 92 year old practice of presenting a separate budget for Railways has been scrapped and proposals pertaining to it would now form part of the General Budget.

This would lead to presentation of a single Appropriation Bill, including the estimates of Ministry of Railways, thereby saving precious time of Parliament by not having to hold separate consideration and passing of two Appropriation Bills.

The Cabinet also approved removal of distinction between Plan and Non Plan expenditure as the present classification resulted in excessive focus on former with almost equivalent neglect to items such as maintenance which are classified as non Plan.

The Cabinet felt it is the total expenditure, irrespective of Plan or Non-Plan, that generates value for the public. Plan expenditure was for the first time presented separately in the budget for 1959 to 1960.

PTI

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Finance Minister Arun Jaitley announced that the Income Tax exemption limit for individual taxpayers, below the age of 60 years has been raised from Rs. 2 lakhs to Rs. 2.5 lakhs.

The General Budget 2014-15 presented by the Union Finance Minister Shri Arun Jaitley on 10th this month, most Central Government employees were hoping that the Income Tax exemption limit for salaried pupil would be raised to atleast Rs 3 lakhs this time. But the Finance Minister delivered a shock and disappointment to everyone with an increase of a mere Rs. 50,000.

Prior to the election, based on the speeches and statements issued by the now Finance Minister, there were talks that the non-taxable income limits would be raised to Rs. 5 lakhs.

Central Government employees, who were constantly disappointed in the past few years, were not ready to believe it. But they reluctantly hoped that the amount would be raised by Rs. 1 lakh.

The fact that it was increased by only Rs. 50,000 had disappointed many. It could have been much worse had there not been any increase at all or if it was a consolatory hike of Rs. 10,000.

The Minister explained that he couldn’t offer anything more for the time being due to acute cash crunch for the newly elected Government. But he assured everybody that it is just the beginning, and that there will be plenty of positive changes in the future. Since this is the first budget presented by the new Government and since he has already granted exemption of Rs. 50,000, his promise is very believable.

It is worth mentioning that tax exemption under Section 80C is going to be increased from Rs. 1 lakh to Rs. 1.5 lakhs. It is a painful fact that tax exemptions for savings had not been increased for a number of years. There were rumours that the Government is planning to hike the exemption by Rs. 1 lakh, but the Finance Minister has offered much-needed consolation by increasing it by Rs. 50,000.

Although the change is not a huge one for thousands of Government employees who have been waiting for tax relief for a number of years, they are bound to feel mildly reassured.

The table given below shows the non taxable salary slab for the past eight years.

Source : CGEN.in
[http://centralgovernmentemployeesnews.in/2014/07/income-tax-exemption-limit-raised-by-rs-50000-does-it-meet-the-central-government-employees-expectations/]

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The Finance Bill 2013-14 proposes a relief of Rs.2000 to every person who has a total income upto Rs.5 lakh in a financial year. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram said that 1.80 crore taxpayers are expected to benefit to the value of Rs.3600 crore on account of this proposal of tax credit of Rs.2000. He further said that the current slabs were introduced only last year. Hence, there is no case to revise either the slabs or the rates. However, he proposed to give some relief to the taxpayers in the first bracket of Rs.2 lakh to Rs.5 lakh.

The post Relief for Taxpayers in the Bracket of Rs.2 Lakh to 5 Lakh Tax Credit of Rs.2000 to Every Person with Total Income upto 5 Lakh appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.