Besides a slew of measures for the agriculture and rural sectors, a new health insurance scheme for the poor and some relief in income tax for the salaried class and senior citizens, were announced by Finance Minister Arun Jaitley today in the last full budget before the general elections.
Keeping the income tax rates and slabs unchanged, the Finance Minister introduced a Rs 40,000 Standard Deduction for salaried employees and pensioners in lieu of transport and medical expenses.
For senior citizens, exemption of interest income on bank deposits was raised to Rs 50,000 from the current Rs 10,000, he said, adding that tax will not be deducted at source on fixed deposits.
Also, exemption on medical expenses on critical illness has been raised to Rs 1 lakh.
Presenting his fifth straight budget in the Lok Sabha, Jaitley also raised the health and education cess, levied on all taxable income, to 4 per cent from current 3 per cent, and introduced a social welfare surcharge of 10 per cent to fund social welfare schemes.
In other taxation measure, the corporate tax for small, micro and medium enterprises with turnover of up to Rs 250 crore was lowered to 25 per cent from current 30 per cent, while reintroducing the tax on long term capital gains of over Rs 1 lakh made from the sale of shares.
A 10 per cent tax on distributed income by equity oriented mutual funds has also been proposed in the budget.
With excise duty and service tax being subsumed in the Goods and Services Tax (GST), Jaitley made changes only in customs duty — raising them in case of mobile phones and lowering for raw cashew.
In a bid to provide universal healthcare, he announced a ‘National Health Protection scheme’ to provide health cover of upto Rs 5 lakh to each of the 10 crore poor family per year.
Jaitley also announced 100 per cent tax deduction for farm producer firms with Rs 100 crore turnover. The standard deducation allowed will benefit 2.5 crore people.
(With inputs from PTI)