NEW DELHI: Finance Minister Arun Jaitley who presented his fourth annual budget on wednesday announced that the government will reduce the tax rate of individuals earning between Rs 2.5 lakh to Rs 5 lakh to 5% from the current 10%.
This would also translate into an additional benefit of Rs 12,500 for tax payers even beyond Rs 5 lakh.
The minister also imposed a surcharge of 10 percent for those whose annual income is Rs 50 lakh to Rs 1 crore. The 15% surcharge on incomes above Rs 1 crore will continue.
Stating that political parties continue to receive most funds through anonymous donation, Jaitley announced that the maximum amount of cash donation a political party can receive is Rs 2000 from any one source.
The minister also said the government plans to extend the basket of financial instruments to which the capital gains can be invested without the payment of tax.
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.
FM Jaitley also announced some changes that would encourage affordable housing. The holding period for immovable property for LTCG has been reduced to 2 years. FM Jaitley said that his tax proposals are directed at providing relief to the middle class and to stimulate growth