The Union Budget of 2017 may have come as a relief to many on the personal tax front, especially those in the salary bracket below Rs 5 lakh.
On Wednesday, Finance Minister Arun Jaitley announced a few relief points for various salary slabs in the market. Here are a few highlights:
Existing rate of taxation for individual assessees with incomes between of Rs 2.5 lakh and Rs 5 lakh reduced to 5 percent from the present rate of 10 percent.
Surcharge of 10 percent of tax payable on categories of individuals whose annual taxable income is between Rs 50 lakh and Rs 1 crore. This means that on the taxable income of the assessee, a further 10 percent will be charged.
Simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income up to Rs 5 lakh other than business income.
Appeal to all citizens of India to contribute to nation building by making a small payment of 5 percent tax if their income is falling in the lowest slab of 2.5 lakh to 5 lakh.
Further, citing a few key data points, the FM said,
There are 3.7 crore individuals who have filed taxes for the last year.
99 lakh tax filers showed exemptions since their salary was under the Rs 2.5 lakh annual tax bracket.
52 lakh individuals were in the Rs 5 lakh to Rs 10 lakh bracket.
24 lakh individuals were above the Rs 10 lakh annual income bracket.
Of the total tax filers, 76 lakh above the Rs 5 lakh annual income bracket, only 20 lakh were businessmen, with the rest being part of the salaried class.
Mocking the size of India's tax net, the FM said that there were 2 crore individuals who travelled abroad in 2015-16, a number that dwarfs the figure of assessees who declared an income of above Rs 10 lakh.
The FM later also went on to cite the following data with regard to deposits during the demonetisation period:
Deposits between Rs 2 lakh and Rs 80 lakh were made in about 1.09 crore bank accounts. The average deposit size in these accounts was Rs 5 lakh.
Deposits of more than Rs 80 lakh were made in 1.48 lakh accounts. The average deposit size in these accounts was Rs 3.31 crore.