Tax sops for small I-T payers, hike in super-rich surcharge

February 29, 2016

New Delhi, Feb 29: The Budget for 2016-17 today offered sops for small and marginal income tax payers, hiked the surcharge by 3 per cent on earnings above Rs 1 crore, levied a pollution cess on petrol, diesel cars and SUVs and offered a one-time compliance window for domestic black money holders slapping a tax and penalty of 45 per cent.

Tax

Presenting the third Budget, Finance Minister Arun Jaitley also proposed a 'Krishi Kalyan' cess of 0.5 per cent on all taxable services to improve agriculture and reduction of duties on project imports for cold room for cold chain, refrigerated containers and a number of other items.

Cigarette and tobacco products will become costlier with the hike in excise duty by 10 to 15 per cent.

While the revenue loss on direct taxes will be Rs 1060 crore, his indirect tax proposal will mobilise an additional Rs 20,670 crore. Net revenue gain will be Rs 19,610 crore.

In a bid to shore up the economy hit by global slowdown, the Budget proposes a 15.3 per cent higher expenditure at Rs 19.78 lakh crore in 2016-17, consisting of Rs 5.50 lakh crore under Plan and Rs 14.28 lakh crore under non-Plan.

The Budget provides an outlay of Rs 162,759 crore for defence in 2016-17, up by 13 per cent from Rs 143,236 crore in the revised estimates for the current year. Capital expenditure on defence has been put at Rs 86,340 crore against Rs 81,400 crore in the current year's revised estimates.

Interest payment will account of Rs 492,670 crore against Rs 442,620 crore. Subsidies will marginally lower at Rs 250,433 crore as opposed to Rs 257,801 crore in the revised estimates.

In relief to small tax payers, the Budget proposes to raise the ceiling of tax rebate under Section 87(A) from Rs 2000 to Rs 3000 for incomes not exceeding Rs 5 lakh per annum. There are two crore tax payers in this category who would get a relief of Rs 3000 in their tax liability.

Those who do not have house of their own and do not get house rent allowance from employers will get a deduction of Rs 60,000 per year as against existing Rs 24,000.

First time home buyers will get a deduction of an additional interest of Rs 50,000 per annum for loan upto Rs 35 lakh, during 2016-17, provided the house value does not exceed Rs 50 lakh.

The Budget proposes to extend the presumptive taxation scheme to professionals with gross receipt up to Rs 50 lakh with the presumption of profit being half of the gross receipt.

After pursuing blackmoney abroad, Jaitley today offered a limited period compliance window for domestic holders of unaccounted income and assets to declared their undisclosed income and assets and clear past transgressions by paying tax at 30 per cent plus 7.5 per cent penalty and 7.5 per cent of interest, a total of 45 per cent.

For the foreign blackmoney holders, the total tax and penalty was 60 per cent for those came clean.

In the domestic scheme, the Minister declared that there will be no scrutiny or inquiry regarding income tax declared under the scheme under I-T and Wealth Tax Act and they will have immunity from prosecution.

Immunity from benami transaction act of 1998 is also proposed subject to certain conditions.

The 7.5 per cent surcharge will be called Krishi Kalyan Surcharge to be used for agriculture and rural economy.

"We plan to open the window under this Income Disclosure Scheme from June 1 to September 30, 2016 with an option to pay amount due within two months of declaration," he said.

A Krishi Kalyan Cess of 0.5 per cent would cover all services, proceeds of which will be used for financing incentives for improvement of agriculture and welfare of farmers. The cess will come into effect from June 1.

Raising concern over pollution and traffic situation in cities, Jaitley said he propose to levy infrastructure cess of 1 per cent on small petrol, LPG, CNG cars, 2.5 per cent on diesel cars of certain capacity and 4 per cent on higher engine capacity vehicles and SUVs.

Recalling his last year's promise of reducing corporate tax from 30 to 25 per cent over a period accompanied by rationalisation and removal of exemptions and incentives, Jaitley today limited accelerated depreciation provided under I-T Act to a maximum of 40 per cent from April 1, 2017.

The benefit of deduction for research would be limited to 150 per cent from April 1, 2017 and 100 per cent from April 2020.

To boost domestic manufacturing and job creation, he allowed new units incorporated on or after March 1, 2016 an option of being taxed at 25 per cent plus surcharge and cess provided they do not claim profit linked or investment linked deductions.

He also proposed lower corporate income tax rate for next financial year of relatively small enterprises with a turnover not exceeding Rs 5 crore in fiscal 2016 to 29 per cent plus surcharge and cess. At present they pay 30 per cent plus surcharge and cess.

In a bid to promote employment through startups under the Make-in-India programme, the Budget proposes to assist their propagation through 100 per cent deduction of profit for three out of five years for companies set up between April 2016 and March 2019.

Minimum Alternate Tax will apply in such cases. Capital gains will not be invested in regulated/ notified fund or funds and by individuals in notified startups in which they hold majority shares.

As part of an attempt to incentivise domestic value addition in the Make in India campaign, he proposed to suitable changes in customs and excise duty rates on certain inputs, raw material, intermediaries and components to reduce cost and improve competitiveness of domestic industry in various sectors including IT, IT hardware, capital goods, defence production, MRO of aircrafts and ships, and textiles.

The period of getting benefit of long term capital gain regime in case of unlisted companies is proposed to be reduced from 3 to 2 years.

The controversial General Anti Avoidance Rules or GAAR will be implemented from April 1, 2017, he said.

The 12 per cent surcharge on personal income above Rs 1 crore has been raised to 15 per cent.

The Budget also proposes to collect tax at source at the rate of one per cent on purchase of luxury cars exceeding value of Rs 10 lakh and purchase of goods and services in cash exceeding Rs 2 lakh.

It also seeks to impose an excise duty of 1 per cent without input tax credit or 12 per cent with input tax credit, on articles of jewellery excluding silver other than studded with diamond or some other precious stone with a higher exemption and eligibility limit of Rs 6 crore and Rs 12 crore respectively.

As an additional resource mobilisation for agriculture and rural economy, the Finance Minister proposed a 10 per cent additional dividend distribution tax on individuals, HUFs and firms receiving dividend in excess of Rs 10 lakh per annum.

He also proposed a number of measures as part of financial sector reforms that includes enactment of a comprehensive Code on Resolution of Financial Firms to provide with a mechanism to deal with bankruptcy situations in banks, insurance companies and financial sector entities.

This Code together with the Insolvency and Bankruptcy Code 2015, when enacted, will provide a comprehensive resolution mechanism for the economy.

The other steps include amendment of RBI Act to provide statutory basis for a Monetary Policy Framework and a Monetary Policy Committee through the Finance Bill 2016.

He also announced that a comprehensive central legislation will be brought to deal with the menace of illicit deposit taking schemes.

Jaitley proposed Rs 25,000 crore for bank recapitalisation and said the government will also consider the option of reducing its stake to below 50 per cent.

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News Network
December 21,2025

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Invoking the teachings of Prophet Muhammad—“pay the worker before his sweat dries”—the Madras High Court has directed a municipal corporation to settle long-pending legal dues owed to a former counsel. The court observed that this principle reflects basic fairness and applies equally to labour and service-related disputes.

Justice G. R. Swaminathan made the observation while hearing a petition filed by advocate P. Thirumalai, who claimed that the Madurai City Municipal Corporation failed to pay him legal fees amounting to ₹13.05 lakh. Earlier, the High Court had asked the corporation to consider his representation. However, a later order rejected a major portion of his claim, prompting the present petition.

The court allowed Thirumalai to approach the District Legal Services Authority (DLSA) and submit a list of cases in which he had appeared. It also directed the corporation to settle the verified fee bills within two months, without interest. The court noted that the petitioner had waited nearly 18 years before challenging the non-payment and that the corporation could not be fully blamed, as the fee bills were not submitted properly.

‘A Matter of Embarrassment’

Justice Swaminathan described it as a “matter of embarrassment” that the State has nearly a dozen Additional Advocate Generals. He observed that appointing too many law officers often leads to unnecessary allocation of work and frequent adjournments, as government counsel claim that senior officers are engaged elsewhere.

He expressed hope that such practices would end at least in the Madurai Bench of the High Court and added that Additional Advocate Generals should “turn a new leaf” from 2026 onwards.

‘Scandalously High Amounts’

While stating that the court cannot examine the exact fees paid to senior counsel or law officers, Justice Swaminathan stressed that good governance requires public funds to be used prudently. He expressed concern over the “scandalously high amounts” paid by government and quasi-government bodies to a few favoured law officers.

In contrast, the court noted that Thirumalai’s total claim was “a pittance” considering the large number of cases he had handled.

Background

Thirumalai served as the standing counsel for the Madurai City Municipal Corporation for more than 14 years, from 1992 to 2006. During this period, he represented the corporation in about 818 cases before the Madurai District Courts.

As the former counsel was unable to hire a clerk to obtain certified copies of judgments in all 818 cases, the court directed the District Legal Services Authority to collect the certified copies within two months. The court further ordered the corporation to bear the cost incurred by the DLSA and deduct that amount from the final settlement payable to the petitioner.

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December 13,2025

New Delhi: School-going children are picking up drug and smoking habits and engaging in consumption of alcohol, with the average age of introduction to such harmful substances found to be around 13 years, suggesting a need for earlier interventions as early as primary school, a multi-city survey by AIIMS-Delhi said.

The findings also showed substance use increased in higher grades, with grade XI/XII students two times more likely to report use of substances when compared with grade VIII students. This emphasised the importance of continued prevention and intervention through middle and high school.

The study led by Dr Anju Dhawan of AIIMS's National Drug Dependence Treatment Centre, published in the National Medical Journal of India this month, looks at adolescent substance use across diverse regions.

The survey included 5,920 students from classes 8, 9, 11 and 12 in urban government, private and rural schools across 10 cities -- Bengaluru, Chandigarh, Delhi, Dibrugarh, Hyderabad, Imphal, Jammu, Lucknow, Mumbai, and Ranchi. The data were collected between May 2018 and June 2019.

The average age of initiation for any substance was 12.9 (2.8) years. It was lowest for inhalants (11.3 years) followed by heroin (12.3 years) and opioid pharmaceuticals (without prescription; 12.5 years).

Overall, 15.1 per cent of participants reported lifetime use, 10.3 per cent reported past year use, and 7.2 per cent reported use in the past month of any substance, the study found.

The most common substances used in the past year, after tobacco (4 per cent) and alcohol (3.8 per cent), were opioids (2.8 per cent), followed by cannabis (2 per cent) and inhalants (1.9 per cent). Use of non-prescribed pharmaceutical opioids was most common among opioid users (90.2 per cent).

On being asked, 'Do you think this substance is easily available for a person of your age' separately for each substance category, nearly half the students (46.3 per cent) endorsed that tobacco products and more than one-third of the students (36.5 per cent) agreed that a person of their age can easily procure alcohol products.

Similarly, for Bhang (21.9 per cent), ganja/charas (16.1 per cent), inhalants (15.2 per cent), sedatives (13.7 per cent), opium and heroin (10 per cent each), the students endorsed that these can be easily procured.

About 95 per cent of the children, irrespective of their grade, agreed with the statement that 'drug use is harmful'.

The rates of substance use (any) among boys were significantly higher than those of girls for substance use (ever), use in the past year and use in the past 30 days. Compared to grade VIII students, grade IX students were more likely, and grade XI/XII students were twice as likely to have used any substance (ever).

The likelihood of past-year use of any substance was also higher for grade IX students and for grade XI/XII students as compared to grade VIII students.

About 40 per cent of students mentioned that they had a family member who used tobacco or alcohol each. The use of cannabis (any product) and opioid (any product) by a family member was reported by 8.2 per cent and 3.9 per cent of students, respectively, while the use of other substances, such as inhalants/sedatives by family was 2-3 per cent, the study found.

A relatively smaller percentage of students reported use of tobacco or alcohol among peers as compared to among family members, while a higher percentage reported inhalants, sedatives, cannabis or opioid use among peers.

Children using substances (past year) compared to non-users reported significantly higher any substance use by their family members and peers.

There were 25.7 per cent students who replied 'yes' to the question 'conflicts/fights often occur in your family'. Most students also replied affirmatively to 'family members are aware of how their time is being spent' and 'damily members are aware of with whom they spend their time'.

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December 16,2025

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The deletion of over 58 lakh names from West Bengal’s draft electoral rolls following a Special Intensive Revision (SIR) has sparked widespread concern and is likely to deepen political tensions in the poll-bound state.

According to the Election Commission, the revision exercise has identified 24 lakh voters as deceased, 19 lakh as relocated, 12 lakh as missing, and 1.3 lakh as duplicate entries. The draft list, published after the completion of the first phase of SIR, aims to remove errors and duplication from the electoral rolls.

However, the scale of deletions has raised fears that a large number of eligible voters may have been wrongly excluded. The Election Commission has said that individuals whose names are missing can file objections and seek corrections. The final voter list is scheduled to be published in February next year, after which the Assembly election announcement is expected. Notably, the last Special Intensive Revision in Bengal was conducted in 2002.

The development has intensified the political row over the SIR process. Chief Minister Mamata Banerjee and her Trinamool Congress have strongly opposed the exercise, accusing the Centre and the Election Commission of attempting to disenfranchise lakhs of voters ahead of the elections.

Addressing a rally in Krishnanagar earlier this month, Banerjee urged people to protest if their names were removed from the voter list, alleging intimidation during elections and warning of serious consequences if voting rights were taken away.

The BJP, meanwhile, has defended the revision and accused the Trinamool Congress of politicising the issue to protect what it claims is an illegal voter base. Leader of the Opposition Suvendu Adhikari alleged that the ruling party fears losing power due to the removal of deceased, fake, and illegal voters.

The controversy comes amid earlier allegations by the Trinamool Congress that excessive work pressure during the SIR led to the deaths by suicide of some Booth Level Officers (BLOs), for which the party blamed the Election Commission. With the draft list now out, another round of political confrontation appears imminent.

As objections begin to be filed, the focus will be on whether the correction mechanism is accessible, transparent, and timely—critical factors in ensuring that no eligible voter is denied their democratic right ahead of a crucial election.

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