Budget 2016: Tax sops for small I-T payers, hike in super-rich surcharge

The Budget for 2016-17 today offered sops for small and marginal income tax payers, hiked the surcharge by 3 per cent on earnings above Rs 1 crore, levied a pollution cess on petrol, diesel cars and SUVs and offered a one-time compliance window for domestic black money holders slapping a tax and penalty of 45 per cent.

Presenting the third Budget, Finance Minister Arun Jaitley also proposed a ‘Krishi Kalyan’ cess of 0.5 per cent on all taxable services to improve agriculture and reduction of duties on project imports for cold room for cold chain, refrigerated containers and a number of other items.

Cigarette and tobacco products will become costlier with the hike in excise duty by 10 to 15 per cent.

While the revenue loss on direct taxes will be Rs 1060 crore, his indirect tax proposal will mobilise an additional Rs 20,670 crore. Net revenue gain will be Rs 19,610 crore.

The basket of eligible FDI instruments will be expanded toinclude hybrid instruments subject to certain conditions, Jaitley said.

All these decisions, he said, “will facilitate ease of doing business for foreign investors and their domestic recipients”.

The government has already relaxed the FDI policy in over a dozen sectors, including defence, railway, medical devices and civil aviation.

FDI into the country increased by 40 per cent to USD 29.44 billion during the April-December period of the current fiscal.