Finance Minister proposes Budget 2016-17 : Perspective
The finance budget proposed today (29th Feb 2016) has met with mixed reviews from people belonging to different economic sects of India. On the one hand, with tax on HRA being relaxed up to INR 60,000, working people who do not have HRA on their salary structure are feeling relieved.
On the other hand, with increase in service tax from 14.5% to 15%, common public will have to pay more for several facilities such as purchasing mobile phones to eating outside.
Experts laud the pro-poor aspect of the budget as a lot has been done for farmers. Farmer welfare budget of 359.84 billion rupees has been announced. This should surely be a big relief for farmers from across the country. Likewise, additional arrangement for LPG connections for women from rural homes will be made, which is again a welcome pro-poor step.
For businesses, with a lowering of Corporate IT tax for companies not exceeding Rs. 5 crore turnover to 25% plus surcharge is a welcome move to encourage small business owners to pursue their enterprise with more interest. Evidently, Start-up organizations will see a rise as well. Moreover special hub will be created to support SC/ST entrepreneurs.
However, for those interested in stock markets, with option transaction charges per trade being increased drastically, they may not want to trade in options very frequently.
From an Information Technology perspective, government plans to spend a huge amount of money on higher education financing, of the order of Rs. 1,000 Crores. This will also include digitization of school leaving certificates and diplomas for students, which will simplify the process manifold.
The Aadhaar card will now be more important as all procedures will include referring to it. While the Income Tax slabs remain unchanged, relief to employees comes in the form of lesser taxes being levied on pensions. As there is 40% withdrawal from Super Annuation funds from national pension scheme at the time of retirement, senior citizens requiring a lumpsum amount will find it easier to sustain their needs.
As per Mr. Nikhil Vikamsey of Alpha Capital, patients admitted to hospitals will be greatly benefitted by National dialysis service programme devised under PPP model. He says that as Finance Minister has proposed exempting certain equipment required for dialysis from customs, the total cost incurred by patients will be reduced and thereby beneficial.
For NRI’s, there is hope too. If they do not have a PAN card but furnish alternative documents, there will be no withholding of higher rates of taxes.
For the affluent class, surcharge has been raised from 12% to 15% on incomes above Rs. 1 Crore. Likewise, excise duty on tobacco and ready-made garments of nearly 5% to 6% has also invited mixed reviews from those trading in these products.
Overall, common opinion from people is that this budget is for smaller tax payers and primarily pro-poor. For the middle class, it is a combination of save on one aspect and spend more on other. For the affluent, there is a clear increase in taxes, which has always happened.