Relief to small taxpayers, senior citizens
To provide relief to small and marginal taxpayers and senior citizens, the personal income tax exemption limit has been increased by Rs 50,000 - from Rs 2 lakh to Rs 2.5 lakh in the case of individual taxpayers below the age of 60 years. For senior citizens, the exemption limit has been raised from Rs 2.5 lakh to Rs 3 lakh.
Investment limit under section 80C hiked
To encourage domestic investment in long-term savings and thus boost economic growth, the investment limit under section 80C of the Income Tax Act has been increased from Rs 1 lakh to Rs 1.5 lakh.
Relief on housing loans
To reduce the high cost of housing finance for the middle and lower-middle classes, the deduction limit on account of interest on loans in respect of self-occupied house property is being increased from Rs 1.5 lakh to Rs 2 lakh.
Investment allowance for manufacturing firms
To incentivise smaller entrepreneurs, an investment allowance will be provided at 15 per cent to manufacturing companies that invest more than Rs 25 crore in any year in new plant and machinery. This benefit will be available for three years - for investments up to March 31, 2017.
10-year tax holiday for power firms extended
To help investors plan their investments better, annual extensions are being dropped and the 10-year tax holiday is being extended to undertakings which begin generation, distribution and transmission of power by March 31, 2017.
Relief for foreign portfolio investors
To put an end to the uncertainty felt by foreign portfolio investors, who remain outside India under the apprehension that their presence in the country might have adverse tax consequences, and to encourage them to shift, income arising to foreign portfolio investors from transactions in securities will be treated as capital gains.
15% tax on foreign dividends stays
This concessional rate of tax of 15 per cent on dividends received by Indian companies from their foreign subsidiaries is to be retained without any sunset date, because it has resulted in enhanced repatriation of funds from abroad.
Date for low-cost borrowing extended
The eligible date for borrowing in low-cost long-term foreign currency borrowing has been extended from June 30, 2016 to June 30, 2017, for a concessional tax rate of five per cent on interest payments. This tax incentive is also being extended to all types of bonds and not only infrastructure bonds.
More Aykar Seva Kendras to be opened
A number of Aykar Seva Kendras have been opened in different parts of the country, to enable the income tax department to function as not only an enforcement agency but a facilitator. This facility will be extended by opening 60 more such seva kendras during the current financial year, to promote excellence in service delivery.
Reductions in basic customs duties
To boost domestic manufacture and address the issue of inverted duties, the basic customs duty on fatty acids, crude palm stearin, RBD and other palm stearin, specified industrial grade crude oils, crude glycerin, crude glycerin used in the manufacture of soaps, steel grade limestone and steel grade dolomite, battery waste and battery scrap, coal tar pitch and specified inputs for the manufacture of spandex yarn is being reduced by varying amounts.
Boost for domestic electronics manufacture
To boost domestic production of electronics goods, a basic customs duty of 10 per cent will be imposed on specified telecommunication products that are outside the purview of the Information Technology Agreement; all inputs/components used in the manufacture of personal computers will be exempt from four per cent special additional duty (SAD); an education cess will be imposed on imported electronic products to provide parity between domestically produced goods and imported goods.
Import duties on chemicals cut
In order to encourage new investment and capacity addition in the chemicals and petrochemicals sector, the basic customs duty on reformate, ethane, propane, ethylene, propylene, butadiene, ortho-xylene, methyl alcohol, denatured ethyl alcohol and crude naphthalene is being reduced by varying percentages.
Duty on colour picture tubes cut
Colour picture tubes will be exempted from basic customs duty, to make cathode ray TVs cheaper and help revive manufacturing of TVs in the SME sector. To encourage production of LCD and LED TVs below 19 inches, the basic customs duty on LCD and LED TV panels of below 19 inches will be reduced from 10 per cent to nil.