First published: February 1, 2017, 1:55 PM IST | Updated: 2 mins ago
Finance Minister Arun Jaitley with Budget documents (Photo: PIB)
The Finance Minister chose to move towards person taxation towards the end of his speech, and he entered on a lighter note. “We are largely a tax-non-compliant society,” he said almost winking as he took a pause to drink a sip of water.
And then came the reward, which according to him is well-deserved for those tax-payers who weathered the brunt of the initial days of demonetisation.
In one of the biggest income tax reform in recent years, Jaitley freed up all those with annual income of under Rs 3 lakh from paying any Income Tax while those with an income of under Rs 5 crore now have and halved the 10% tax to 5%.
However, the 10% surcharge imposed on those earning above Rs 50 lakh will hit the wealthy among the salaried hard.
For those in 20 percent (Rs 5 lakh-Rs 10 lakh) and 30 percent (Rs 10 lakh plus), there is a Rs 12,500 rebate in the budget. “The total cost of the two measures for the government will be Rs 15,500 crore,” the FM said. To compensate for this, those earning Rs 50 lakh a year will pay a 10 percent surcharge, he said.