The income tax rate for the tax slab of ₹250,000 to ₹500,000 from 10% to 5%.
This is expected to reduce the tax liability of all persons earning up to ₹5 lakh, to zero with rebate or half.
To avoid duplication of benefit, the existing rebate to the same group of beneficiaries will be reduced to ₹2500, available to assessees having income up to ₹3.5 lakh.
Combined effect of these mean that there will be no tax liability of individuals earning up to ₹3 lakhs.
Tax liability of only ₹2500 for those earning between ₹3-3.5 lakhs.
Individuals earning up to ₹4.5 lakhs will have no tax if they use the full limit of ₹1.5 lakh in investment under Sec. 80c.
All other taxpaying individuals in subsequent brackets will get a uniform benefit of ₹12,500 per person.
There will be a 10% surcharge for those whose annual income is ₹50 lakh to ₹1 crore.
The existing 15% surcharge for those whose annual income is above ₹1 crore will continue.
Small firms with turnover up to ₹50 crore will now only need to pay 25% tax instead of 30%.
Firms incorporated after 31st March 2016 could now avail of a three-year tax holiday in the first seven years of their existence.
Out of 3.7 crore who filed tax returns in 2015-16, only 24 lakh persons showed income above ₹10 lakh.
Of 76 lakh individuals who reported income of over ₹5 lakh, 56 lakh are salaried.
There is also a proposal to allow a carry forward of Minimum Alternative Tax for a period of 15 years up from the current 10 years now.
•Total budget expenditure: Rs21 trillion
•Rs3,000 crore to implement various budget announcements
•Defense expenditure excluding pensions: Rs2.74 trillion
•Consolidated outcome budget for all ministries being created
•Fiscal deficit for FY18 pegged at 3.2% of GDP
•Revenue deficit for FY18 at 1.9