Great news for the common man, no change in tax slabs but cess and excise duty hiked on several products

While presenting his third budget, Finance Minister Arun Jaitley did not change the tax slabs to bring more and more people under the tax net.

Jaitley said the role of tax payers was important in nation building and each rupee contributed to sectors such as infrastructure, rural and social well being.

The net revenue gain of Rs 19,610 crore was due to surplus from indirect taxes.

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He also announced a little relief for professionals and people staying in rented accommodations.

He categorised taxation under 9 disciplines

1. Tax relief to small tax payers:

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Jaitley announced relied for people staying in rented accommodation. The compensation in rent increased from Rs 24, 000 to Rs 60, 000 per anuum
Presumptive income tax scheme to be extended to all professionals with income of Rs 50 lakh with presumption of 50% profit
2. Boost employment and growth:

Deduction in taxes under Skill Development by 2020
10% extra DDT on dividend recipients earning above Rs 10 lakh per annum, says FM in Budget 2016
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100% tax deductions for new startups for first 3 years
More asset reconstruction companies
Residency of foreign companies deferred by one year
Exempt service tax on general insurance service under Nirmaya scheme
Basic custom duty hiked 5%-6%
3. Incentivise domestic value and make in India:
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4. Pension society:
EPF: 40% corpus to be tax free
Annuity income will be non-taxable
Monetary limit 1.5 lakh per annum
Government to introduce bill to amend Companies Act for ease of doing business; to enable registration of companies in a day
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Affordable housing: PM Awas Yojana to be strengthened
100% deduction for undertaking flat of 30 sq metre, however, MAT will apply
First home buyers: deduction for add 50,000 per annum to 35 lakh loans during next fiscal under Rs 50 lakh
Investment in real estate:
Exempt service tax on affordable housing 60 sq meet
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Add resource to more on farm, clean:

Tax 10% at gross amount of dividend will be apd 10lkh/annum
Raise surcharge 12% to 15%
Purchase of luxury cars
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Levy infrastructure cess 1% LPG 2.5 diesel, 4% on high engine capacity and SUVs
Branded excise duty above Rs 1, 000 goes up 6%-12.5%
Hike in excise duty by 10-15% tobacco other than bidis
Krishi Kalyan Cess of 0.5% on all taxable services: FM
Clean Energy Cess to renamed as Clean Environment Cess

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Reducing litigation
Tax evasion to be strengthened
Jaitley came down heavily on black money
3 lakh tax cases pending amounting to Rs 5.5 lakh crore. New dispute resolution scheme to settle case by paying disputed case interest.
Levy of heavy penalty for non payment of tax has led to high litigation. Proposal to modify scheme for penalties

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Simplified taxation

To reduce multiplicity of taxes and cascading - 13 taxes with collection less than Rs. 50 Crores a year abolished.
Use of technology for accountability
Income tax dept. will expand e-sahyog to assist small taxpayers
Plan to use technology in Taxation department in a big way
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