Union Budget 2017: All to get tax benefits, says Arun Jaitley

New Delhi: Union finance minister Arun Jaitley on Wednesday described the Union Budget 2017-18 as one of its kind where every taxpayer was liable to pay reduced taxes.

In an interview to Doordarshan News, Mr Jaitley said it is the “first budget in which every taxpayer has reduced tax liability.”

“While the tax liability of people with incomes of up to Rs 5,00,000 is proposed to be reduced by half, all other categories of taxpayers in the subsequent slabs will also get a uniform benefit of Rs 12,500 per person,” Mr Jaitley said in the interview.

The government has proposed to halve the income tax to 5 per cent for those earning between Rs 2,50,000 and Rs 5,00,000 per annum, in a relief to the middle class.

“This will reduce the tax liability of all persons with incomes below Rs 500,000 either to zero (with rebate) or 50 per cent of their existing liability. It has been done to widen the taxpayer base in the lower slab to bring the non-filers into the tax net,” the finance minister said while adding that the reduction in the income tax for smaller companies was necessary after demonetisation as they were the major job creators.

“Post-demonetisation, I had a promise to keep to help the micro, small and medium enterprises (MSMEs) sector. MSMEs are the job creators,” he said. To make MSME companies more viable and also to encourage firms to migrate to the company format, the budget proposed to reduce the income tax on smaller companies with annual turnovers of up to Rs 50 crore to 25 per cent. There are 6.94 lakh companies filing returns, of which 6.67 lakh fall in this category as per the data of Assessment Year 2015-16. Therefore, percentage-wise 96 per cent of companies will get this benefit of lower taxation.

“This will make our MSME sector more competitive compared with large companies. The estimated revenue forgo vis-a-vis this measure is expected to be Rs 7,200 crore per annum,” Mr Jaitley said in his Budget speech.