Union Budget: Centre extends tax rate of 25% to firms with turnover of up to Rs 400 crore
Finance Minister Nirmala Sitharaman said the Centre would tax cash withdrawals of more than Rs 1 crore from one bank account in a year at 2% TDS.
Union Finance Minister Nirmala Sitharaman on Friday announced that a 25% tax rate would be extended to companies with an annual turnover of up to Rs 400 crore. Earlier, the turnover limit was Rs 250 crore. This will make the tax rate applicable to 99.3% of firms.
Sitharaman, who presented the Union Budget in Parliament, also announced an additional income-tax deduction of Rs 1.5 lakh on interest paid on loans taken to buy electric vehicles. She said customs duty on certain parts of electric vehicles would be removed.
The government also intends to discourage cash transactions. To this end, the finance minister said the Centre would tax cash withdrawals of more than Rs 1 crore from one bank account in a year at 2% Tax Deducted at Source.
The finance minister said a scheme of faceless tax assessment, with no human interface, would be launched this year. The project, which will be launched in stages, will reduce harassment of taxpayers, according to her.
Sitharaman also announced an increase in surcharge on individuals having a taxable income above Rs 2 crore. The surcharge for those who earn between Rs 2 crore to Rs 5 crore will be 3%, while that for individuals earning above Rs 5 crore per annum will be 7%, The Economic Times reported. The government had abolished wealth tax for the rich in 2015.
However, the finance minister did not announce any change in income tax slabs. “I aim to simplify tax administration and bring greater transparency,” she said, according to NDTV. “My tax proposals will aim to stimulate growth, incentivise affordable housing and encourage start-ups by releasing the entrepreneurial spirit.”
The Centre introduced a proposal to make PAN and Aadhaar cards “interchangeable”. This will allow those who do not have a PAN card to give their Aadhaar number whenever needed, including to file tax returns, Sitharaman said.
The government also proposed to increase the special additional excise duty, and road and infrastructure cess each by one rupee a litre on petrol and diesel. It proposed to increase customs duty on gold and other precious metals from 10% to 12.5%.
To encourage start-ups, the finance minister said funds required by these firms would not require any kind of scrutiny from the Income Tax Department.