Monday, February 29, 2016

Annual Budget 2016 – Will the income tax slab increase? Or, will it not?

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Annual Budget 2016 – Will the income tax slab increase? Or, will it not?

“It is important to keep in mind the expectations of Central Government employees, who accurately calculate and set aside more than their one month’s salary to pay income tax each year.”

The annual budget of 2016 is being presented today. Expectations are high that Modi Government will fulfill the requirements of the farmers, industrialists and Central Government employees.

There are conflicting rumours that the income tax slab is likely to be raised this year. Some say that it wouldn’t. 

The Railway Budget was presented on February 25. The Annual Budget of 2016-17 will be presented at 12.00 PM today (February 29, 2016). This is the third general budget presented by the Modi Government’s Finance Minister Arun Jaitley. 

With the Government requiring more than Rs.1 lakh crore to implement the recommendations of the 7th Pay Commission, Arun Jaitley’s budget will reveal how the government intends to raise these funds, and for raising the capital required for the banks. 

The minimum income tax slab for individuals is currently Rs.2.5 lakhs. With increasing prices, the salaried class is eagerly expecting an increase in the tax slabs. Therefore, announcements regarding this are expected in the Budget. With assembly elections scheduled to be held in five states in the near future, the chances of raising the tax slabs are bright. 

With the subsidy burden increasing on the Government, the subsidies for those with annual income above a certain level, will very likely be cancelled. LPG subsidy is very likely to be stopped. And, the number of subsidized cylinders is also likely to be reduced. 

In order to increase the revenue for the government, indirect taxes are likely to be increased. Service taxes are likely to be increased from 14.5 percent to 18 percent. 

Since the import of gold has been increasing, the Rupee is fast losing its value against the US Dollar. Therefore, import tax on gold is likely to increase, according to the sources at the Finance Ministry. 

“The annual exams of the students are starting tomorrow. I’m writing my exams today. I’m confident that I will get through,” Prime Minister Narendra Modi said, about the Budget.

Updated news on Tax

No changes have been made to existing income tax slabs

1% service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.

Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses.

Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.


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