The threshold limit for deduction of tax at source has been raised for unusual income such as winnings from horse race, commission
From the nomenclature of schemes to tax provisions and subsidies, the Union Budget 2016-17 appears to be sprinkled with a number of offbeat elements.
For instance, the centrally sponsored schemes estimated at Rs 2.26 lakh crore have been broken down broadly under three categories: core of the core schemes; core schemes; and optional schemes. While 'core of the core schemes' comprise programmes on employment guarantee and development of backward and vulnerable groups, plans such as green revolution, blue revolution, white revolution, Swachh Bharat and smart cities have been listed under ‘core schemes’. Border area development and national river conservation programmes have been clubbed under ‘optional schemes’.
Also, India Aspiration Fund is among the new mentions in the Budget under the head 'Major Programmes In Central Plan'. The fund, set up by the Small Industries Development Bank of India, was launched by Finance Minister Arun Jaitley in August 2015 with a capital of Rs 2,000 crore (Rs 20 billion) with the aim to create 750,000 jobs in five years. The Budget has allocated Rs 600 crore (Rs 6 billion) for it.
Exit tax for charitable institutions when they cease to exist or convert into a non-charitable organisation is also a first-time inclusion.
“In order to ensure that the intended purpose of exemption availed by a charitable trust or institution is achieved, a specific provision in the Act is required for imposing a levy in the nature of an exit tax, which is attracted when the organisation is converted into a non-charitable organisation or gets merged with a non-charitable organisation or does not transfer the assets to another charitable organisation.”
The Budget has proposed to amend the Charitable Institutions Act and introduce a new chapter to provide for levy of additional income-tax in case of conversion into, or merger with, any non-charitable form or on transfer of assets of a charitable organisation on its dissolution to a non-charitable institution.
Also, the threshold limit for deduction of tax at source has been raised for unusual income such as winnings from horse race, commission on sale of lottery tickets and brokerage. For winnings from horse race, the threshold has been raised from Rs 5,000 to Rs 10,000, commission on sale of lottery tickets from Rs 1,000 to Rs 15,000 and brokerage from Rs 5,000 to Rs 15,000. Rate of deduction has also been lowered for commission on sale of lottery tickets as well as on brokerage from 10 per cent to five per cent, respectively.
In customs duty provisions, e-readers have made an entry into the Budget list this year. From no basic customs duty, e-readers have been imposed a 7.5 per cent duty now.
And, customs duties have been raised from 10 per cent to 60 per cent for golf cars, a category which is not heard about frequently in Budgets. Meanwhile, there is no customs duty on foreign satellite data on storage media imported by the National Remote Sensing Centre, Hyderabad.
Subsidies are yet another area where the government has proposed some tinkering in unusual areas. Subsidy for operation of Haj Charters has been reduced to Rs 450 crore (Rs 4.5 billion) in 2016-17, down from the revised estimate of Rs 530 crore (Rs 5.3 billion) in 2015-16.
Subsidy for helicopter services in the north-east region has been raised marginally from Rs 76.45 crore (Rs 764 million) in the revised estimate of 2015-16 to Rs 86 crore (Rs 860 million) in 2016-17.