NEW DELHI:
Shunning populism, the Union Budget for 2015-16 today proposed a 5 per cent reduction in corporate tax over the next four years, replacing of wealth tax with an additional 2 per cent surcharge on super-rich and raised excise duty and service tax rates that will make a host of articles and services costly.
In the first full-year Budget of the NDA Government, Finance Minister Arun Jaitley made no changes in personal and corporate income-tax rates for 2015-16 but extended benefits to middle-class by increasing the limit of deduction on health insurance premium from Rs 15,000 to Rs 25,000.
For senior citizens, it will go up from Rs 20,000 to Rs 30,000 and for those above 80 years, not covered by health insurance, deduction of Rs 30,000 towards expenditure on medical treatment will be allowed.
While the service tax plus education cess has been raised from 12.36 per cent to 14 per cent that will jack up bills, air travel, eating out and visits to beauty parlours, a new 2 per cent Swachh Bharat cess on taxable services is also being proposed from a future date.
However, some items like leather footwear, locally made mobiles, computer tablets, microwave ovens, packaged fruits and ambulance services will become cheaper. Like his predecessors, Jaitley was also severe on smokers by coming down heavily by up to 25 per cent increase in duty on cigarettes, cigars and cheroots. Cement will also be costlier.
In a Budget which Jaitley called a balancing act to promote growth and jobs through larger spendings, some social sector expenditure has also been cut in areas like child development programme.
Under attack over unearthing blackmoney, Jaitley announced that a new comprehensive law will be brought to provide for a jail term upto 10 years for hiding foreign assets and a 300 per cent penalty on undislcosed income and asset abroad.
The Minister also announced fresh incentives for individual tax payers that will take the overall deduction limit to Rs 4,44,200 a year.
The Budet proposed raising the tax deduction limit by Rs 10,000 for payment towards health insurance premium. Also, exemption of transport allowance has been doubled to Rs 19,200 per year. (AGENCIES)
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