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Finance Minister Arun Jaitley while presenting the Budget speech for the financial year 2018-2019, once again reinforced Prime Minister Narendra Modi’s vision for women empowerment. Not only did he offer free LPG connections to 80 million women below the poverty line, but also lowered women’s contribution for Employees Provident Fund (EPF) to eight per cent from 12 per cent earlier.
This means that if a woman, for instance, earns Rs 50,000 per month or Rs 600,000 per annum, she would have to pay Rs 4,000 instead of Rs 6,000 earlier. The take-home pay for her would increase by Rs 2,000 per month or Rs 24,000 annually.
The move will aid women in taking more money home besides encouraging them to join the formal employment sector.
“Women workers’ contribution towards EPF will be reduced to eight per cent for the first three years, without employer’s contribution being reduced. This will allow more women to get into the formal economy,” Jaitley said.
But other taxpayers should be worried
Stating that standard deduction would benefit 25 million Indians, Arun Jaitley offered a standard deduction of Rs 40,000 for salaried taxpayers in lieu of in lieu of transport, medical expense. This would cost the government revenue of Rs 80 billion (Rs 8,000 crore). The transport allowance offered to an employee is around Rs 19,200 (Rs 1,600 per month). Similarly, the medical reimbursement offered on an average is Rs 1500 per month or Rs 15,000 annually. Therefore, the total conveyance stands at Rs 34,200.
Writing for Business Standard, Dilasha Seth says that the actual benefit on an annual basis will only be Rs 6,800 per person for the deductions.
Finance Minister Arun Jaitley said that Rs 900 billion (Rs 90,000 cr) extra was collected as personal income tax in the past year, therefore he "will continue with tax policies that reward honest taxpayers."
This means that despite a 50 per cent increase under goods and services tax (GST), the reward for the “honest taxpayers” stands below Rs 7,000 annually.