Finance Minister Arun Jaitley today announced a 5 per cent reduction in corporate tax over next four years, abolished wealth tax and replaced it with an additional 2 per cent surcharge on super-rich individuals, while increasing service tax that will result in higher cost of variety of services.
In his first full Budget, Arun Jaitley on announced plans for a new law to tackle black money with tough measures – including imprisonment up to 10 years and 300% penalty on tax – for concealing income and assets, sprinkled benefits for the poor, and gifted tax concessions for the Aam Aadmi.
To give growth a fillip and create more jobs, the finance minister walked the tightrope and deftly increasing infrastructure spends without really letting the fisccal go awry. He provided an additional more money for public investment in 2015-16 from his Budget, created new avenues for unlocking funds such as schemes to monetise unproductive gold assets, set up a National Investment and Infrastructure Fund with annual flows of Rs 20,000 crore, and allowed infra bonds for investing in rail, road and irrigation projects.
For the Aam Admi, he announced a slew of tax concessions. He hiked the deduction on health cover premiums to Rs 25,000 from Rs 15,000 now, increased deduction towards pension contribution to Rs 1.5 lakh from Rs 1 lakh now, allowed extra deduction of Rs 50,000 towards New Pension Scheme and doubled transport allowance to Rs 1,600 a month. “An individual taxpayer will get tax benefit of Rs 4,44,200,” he said.