Tax benefits unlikely for individuals in Budget

Share
Faced
with a challenging financial scenario in 2016-17, the Union Government is
unlikely to dole out any income tax benefits to individual payers. It, however,
may consider levying additional measures for revenue mobilization.
“The
fiscal space will be severely restricted in 2016-17 due to additional
expenditure commitments. Further, there will also be boost to many individual
taxpayers through the Seventh Pay Commission so additional incentives may not
be required in the Union Budget,” said two officials familiar with the
development.
The move
would be a break from the last two Budgets when Finance Minister Arun Jaitley
provided significant sops to personal income taxpayers.
While the
Minister raised the deduction limit for health insurance in this Budget, he had
hiked the personal income tax exemption limit by Rs. 50,000 in the 2014-15
Budget.
Seventh Pay panel burden
The
thinking comes as the Finance Ministry tries to balance the additional spending
of nearly Rs. 1,40,000 crore on the implementation of the Seventh Pay
Commission report and the One Rank One Pension scheme in 2016-17 while
maintaining its fiscal deficit targets and boosting public investments in
infrastructure.
Low chances
Tax
experts too said that the chances of a tweak in the personal income tax slabs
are low in the forthcoming Union Budget.
“There
are expectations of relief from the common man on personal taxes. The
government could consider options such as making the tax regime for National
Pension System to exempt status (E-E-E). Alternatively, it could also provide
relief by hiking the allowance for conveyance, medical expenses or children’s
education that have not been revised for long,” said Divya Baweja, Partner,
Deloitte Haskins & Sells.
Additionally,
the Finance Ministry is also considering imposing further checks on black money
that would also help raise tax revenue.
One of
the proposals on the discussion board is to review the sources for Annual
Information Returns that captures data on high value transactions by taxpayers.
TDS collections
The
Finance Ministry is understood to be also considering widening the scope of tax
deducted at source for more transactions.
“These
are part of initial discussions. The focus will be to widen the tax collection
base while ensuring that the tax administration remains friendly and does not
harass individual taxpayers,” one of the officials stressed.
Sources
said the Finance Ministry is also hoping for a healthy rise in income tax
collections next fiscal on the back of higher salaries and pensions to a
sizeable part of the taxpayer base. Initial estimates reveal that tax
authorities may project about a 20 per cent rise in personal income tax
collections next fiscal.
RECOMMENDED READ  Penalty order passed U/S 271C for non-deduction of TDS, beyond period of 6 months from date of reference for imposition of penalty would be barred by limitation

Leave a Reply

Written by

Optimization WordPress Plugins & Solutions by W3 EDGE
%d bloggers like this: