In the last week of the month of February, 2016, the Finance Minister- Arun Jaitley introduced the FINANCE BILL of 2016 (Bill no. 18 of 2016). The Bill is brought to authorise expenditure from the Consolidated Fund of India and contains tax proposals of the Government. The object of the Bill is to provide effect to the Financial proposals of the Central Government for the Financial year 2016- 2017. There are numerous provisions provided in this Bill and as such the summery of some most important provisions have been provided in this article.
The provisions in the Bill relating to the Taxes and their rates proposed for the assessment year 2016- 2017 are sought to be provided in the earlier provisions of the Bill which are contained under Chapter- II thereof. For the rate of Income tax for the said assessment year, the Bill provides a First Schedule in which if the amount of Rs. 2.5 laks is made the Income tax slab, and the amount from Rs. 2.5 to Rs. 5 lak will be chargeable for tax and the rate will be 10 per cent of such amount exceeding Rs. 2.5 till Rs. 5 lak. Moreover, the amount exceeding Rs. 5 laks to Rs. 10 laks will be chargeable for Income tax at the rate of 20 per cents and the amount exceeding Rs. 10 laks, will be chargeable at the rate of 30 per cents. Similarly, the suitable benefits and rates for the income are fixed for the of the individuals with several age groups. Further, chapter- III is making provisions for the amendment of the various provisions under the Income- Tax Act. And the Chapter- IV is providing for the amendments in the provisions of the laws relating to the indirect taxes like Customs and Excise. Moreover, the Chapter- V of the Act is making amending provisions for the amending the Service tax law.
Moreover, this year, the FINANCE Bill is seeking to provide for the new chapters, in which Chapter- VI is connected with the levy of cess in the name ‘Krishi Kalyan Cess’ as a service tax on all or any of the taxable services for the purposes of the Union for financing and promoting initiatives for improving agriculture, etc. Further, Chapter- VII being new chapter is providing a levy of ‘Infrastructure Cess’ at the rate of 4 per cent as a excise duty on all goods specified in Eleventh Schedule of the Act. Also, a new Chapter- VIII of the Bill is requiring the Equalisation Levy and collection and recovery thereof, however, such equalisation levy will be brought into force after the Central Government notifies it.
Also, the present Bill is seeking to introduce a new Income Declaration Scheme of 2016, which will be requiring the disclosure of the undisclosed income of the person and it is also sought that the present concerned scheme to be brought into effect on First day of June, 2016 and it will continue to have effect till the Central Govt. notifies its end. Moreover, this scheme will be providing the imposing of the tax at the rate of 30 per cent on the undisclosed income which will be declared under this scheme in addition to the surcharge and penalties. Also, the new chapters for Direct Tax disputes resolution scheme and Indirect Tax disputes resolution scheme are provided. Thus, a comprehensive bill is now pending before the house of the Parliament.
Read the Bill here