Budget 2017: Personal Income Tax Rate Reduced To 5% For Those Earning Upto Rs 5 Lakh


Finance Minister Arun Jaitley in Union Budget 2017 slashed the existing rate of taxation for individuals with income between Rs 2.5 lakh to Rs 5 lakh to 5 percent from the existing 10 percent.

“While the government is trying to bring in its tax net more people who are not paying tax, the present burden is on the taxpayer and on the employees who are showing their income correctly,” Jaitley said.

news24in7

The finance minister added that there was a “legitimate expectation” post demonetisation that tax burden on honest individuals be lowered. Further, Jaitley emphasised that if the nominal tax rate is lower for the lowest slab, more people will prefer to come under the tax net.

CALCULATE YOUR NEW TAX LAIBILITY

Earlier, personal income tax was exempt for an annual income up to Rs 2.5 lakh but charged at 10 percent for income between Rs 2.5 lakh to Rs 5 lakh.
As this comes down to 5 percent, the tax burden of individuals in the income bracket is likely to become zero or halve as compared to previous years, Jaitley said.
Individuals with income between Rs 5 lakh and Rs 10 lakh will continue to be taxed at 20 percent and those above the Rs 10 lakh income bracket will be taxed at 30 percent, the finance minister added.

“If the exemption of Rs 1.5 lakh is used fully under Section 80C, the tax liability will be zero for income up to Rs 4.5 lakh,” Jaitley said. “All other categories of tax payers in subsequent brackets will also get a uniform benefit of Rs 12,500 per person.”
Jaitley said that the government will forego revenue to the tune of Rs 15,500 crore due to the tax incentive. To recover some of the revenue loss, he announced an additional surcharge of 10 percent for those whose annual taxable income is between Rs 50 lakh to 1 crore; Surcharge on income of Rs 1 crore or more remains unchanged.

In order to expand the tax net, the government also proposed a simple one-page form for individuals with an income up to Rs 5 lakh. Jaitley also said that anyone filing income tax return for the first time will not be subject to any income scrutiny in the first year unless there’s specific information with the taxman about high-value transactions.

“I appeal to all citizens to contribute to nation building by making a small contribution of 5 percent tax if their income is under Rs 5 lakh,” Jaitley said.

–Bloomberg Quint

Budget 2017: Cash No Longer Valid For Payments Above Rs 3 Lakh


Digital payments in India are set to get a big boost with Finance Minister Arun Jaitley, in his Budget 2017 speech, announcing that cash will be no longer allowed for transactions of more than Rs 3 lakh.

Budget 2017 year on cube with pencil and clockThe government also proposed a new payments regulator to be set up within the Reserve Bank of India. Jaitley said the government is also working to quickly roll out the recommendations put forward by a committee of chief ministers on digital transactions.
Arun Jaitley, Finance Minister In His Budget Speech To begin with, it is proposed to create a payment regulatory board in the Reserve Bank of India by replacing the existing board of regulations and supervision of payment systems. As we move faster to the path of digital and cheque payments, it is necessary to ensure that payees of dishonoured cheques are able to realise their payments. Therefore, the government is considering the option of amending the Negotiable Instruments Act suitably.

While the government brings about structural changes in payment regulation, it is also promoting digital transactions by proposing and potentially mandating petrol pumps, fertiliser depots, hospitals and colleges to have the option of accepting digital payments, including from the BHIM app.

Jaitley also announced two new schemes targeted at increasing the number of digital transactions through its flagship BHIM app — a referral bonus scheme for individuals and a cash-back scheme for merchants.

Budget 2017 set a target of 2,500 crore digital transactions in the upcoming financial year through various modes such as UPI, Aadhaar Pay and plastic cards.

While the government is yet to roll out Aadhaa- based payment systems — which come with their set of safety concerns — Jaitley said that 20 lakh Aadhaar enabled point-of-sale machines will be rolled out by September 2017.

According to Reserve Bank of India data, the value of debit card transactions at point of sale (PoS) terminals has grown by over 63 percent between 2012 and 2015. Credit card transactions at PoS terminals has grown 54 percent.

However, estimates suggest that 90% of transactions by value are still being carried out in cash in the country. This is set to change with the government’s latest push for digital payments post demonetisation.

In its attempt to boost use of cards, wallets and unified payments interface, the government has announced that banks will deploy 10 lakh additional PoS machines by March 2017 which will be complemented by the launch of Aadhaar Pay, which obviates the need of having a phone, debit card or passwords.

Bloomberg Quint

Demonetisation: 10 big revelations from RBI’s note to Parliament panel


news24in7

The Reserve Bank of India (RBI) in its reply to the Parliament panel on demonetization has said the decision to ban Rs 500 and Rs 1000 notes was a joint decision between the central bank and the government.
In details available exclusively with India Today TV, the RBI also said it considered printing Rs 5000 and Rs 10,000 notes.

HERE ARE THE 10 BIG REVELATIONS

  1. RBI says demonetization of high-value notes was a ‘joint decision’ between the government and the central bank.
  2. Demonetization’s primary objective was to crack down on counterfeit notes.
  3. RBI mooted introducing 5000 & 10,000 rupee notes as early as October, 2014 – a few months after Modi came to power.
  4. RBI said the Rs 2000 note was chosen in view of the inflation and to manage currency logistics.
  5. On why Rs 2000 note was not introduced in a phased manner, the RBI said the new design will ‘catch the fancy of the public’.
  6. Asked when the printing of new currency notes started, the bank said: June 2016.
  7. On what led to the final decision on demonetization, the RBI said new currency had reached critical minimum stock.
  8. The RBI said it had weighed in the cash crisis and understood that it might not be possible to replace notes fully.
  9. The RBI considered digital payment option to take a part of the cash crunch load.
  10. The RBI claims demonetization had no impact on its balance sheet.

Source: Yahoo