Direct Taxes
Exemption limit for the general category of individual taxpayers enhanced from 1,60,000 to ` 1,80,000 giving uniform tax relief of ` 2,000.
Exemption limit enhanced for Senior Citizen to Rs 250000 and qualifying age reduced for senior citizens from 65 to 60 Years.
Higher exemption limit of Rs 500000 for Very Senior Citizens, who are 80 years or above.
Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.
Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to 18.5 per cent of book profits.
Tax incentives extended to attract foreign funds for financing of infrastructure.
Additional deduction of 20,000 u/s 80C for investment in long-term infrastructure bonds proposed to be extended for one more year.
Lower rate of 15 per cent tax on dividends received by an Indian company from its foreign subsidiary.
Benefit of investment linked deduction extended to businesses engaged in the production of fertilisers.
Investment linked deduction to businesses developing affordable housing.
Weighted deduction on payments made to National Laboratories, Universitiesand Institutes of Technology to be enhanced to 200 per cent.
System of collection of information from foreign tax jurisdictions to be
strengthened.
A net revenue loss of ` 11,500 crore estimated as a result of proposals.
Indirect Taxes
To stay on course for transition to GST.
Central Excise Duty to be maintained at standard rate of 10 per cent.
Reduction in number of exemptions in Central Excise rate structure.
Nominal Central Excise Duty of 1 per cent imposed on 130 items entering in the tax net.
Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.
Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 per cent.
Peak rate of Custom Duty held at its current level.
Service Tax
Standard rate of Service Tax retained at 10 per cent, while seeking a closer fit between present regime and its GST successor.
Hotel accommodation in excess of ` 1,000 per day and service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax.
Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning.
Service Tax on air travel both domestic and international raised.
Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net.
All individual and sole proprietor tax payers with a turn over upto 60 lakh freed from the formalities of audit under Service Tax.
To encourage voluntary compliance the penal provision for Service Tax are being rationalised. Similar changes being carried out in Central Excise and Custom laws.
Proposals relating to Service Tax estimated to result in net revenue gain of 4,000 crore.
Proposals relating to Direct Taxes estimated to result in a revenue loss of 11,500 crore and those related to Indirect Taxes estimated to result in net revenue gain of ` 11,300 crore.
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