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Union Budget
Union Budget 2015-16: Be ready to pay more as Arun Jaitley's budget increases service tax to 14 per cent
Narendra Modi-led NDA government has presented its first Union budget for 2015-16 in parliament today. Finance minister Arun Jaitley's budget has increased service tax from 12.36 per cent to 14 per cent. Against all expectations of the salaried class, there is no change in the existing income tax rates for the individuals. The government has decided to go with the existing tax slab.

Arun Jaitley who presented his government's first full-fledged budget in the parliament announced to bring down the corporate tax from 30 per cent to 25 per cent over next four years. Wealth tax has been abolished. Instead rich has to pay a two per cent of surcharge if their annual income is more than Rs. one crore.

The increase in service tax to 14 per cent is set to increase the cost number of services being availed by the common man. Be it telephone bill, restaurant bill, cable bill, internet, cab or any other services that give you proper receipt will be costly. Now you have to pay more for booking your train or air ticket through internet. Courier services, gym, beauty parlor will also be costly. Payment through credit and debit card will also be more costly now.     

Claiming to give benefits to middle class tax payers in the budget 2015-16, Arun Jaitley has proposed rationalization of various tax exemptions and incentives to reduce tax disputes and improve tax administration. He said, with a view to encourage savings and to promote health care among individual tax payers, it is proposed to increase the limit of reduction of health insurance premium from Rs 15,000 to Rs 25,000 and for senior citizen this limit is increase from Rs 20,000 to Rs 30,000.

Limit on deduction on account of contribution to a pension fund and the new pension scheme is proposed to be increased from Rs 1 lakh to Rs 1.5 lakh. Additional deduction of Rs 50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD increasing from Rs 1 lakh to Rs 1.5 lakh.

Meanwhile Prime Minister Narendra Modi while congratulating FM Arun Jaitley called the Union budget as pro-poor, pro-middle class and pro-growth.

Modi also said that the budget announced today is a step towards a prosperous future.

The Congress has termed the budget 2015-16 as corporate friendly budget, which ignores commons man. Sonia Gandhi-led party also called it 'hollow and plain' budget.

The budget has set the country's fiscal deficit target for the 2015-16 financial year at 3.9% of gross domestic product. The government has target to reduce it gradually to 3% by 2017-18.

The budget has allocated Rs. 2,46,726 crore for Defence sector while focusing on Make in India for quick manufacturing of Defence equipment.

Arun Jaitley has said that a Bill to enact a new law to deal with black money is to be introduced in the current session of the Parliament. In his Budget Speech in the Lok Sabha, giving details of proposed key features of the law, the Finance Minister said this is the first and foremost pillar of his tax proposals.

Jaitley said there will be a provision for rigorous imprisonment up to 10 years for concealment of income and assets and evasion of tax in relation to foreign assets. Such offence will be made non-compoundable.

A penalty for such concealment of income and assets at a rate of 300% of tax is also proposed. Non-filing of return/filing of return with inadequate disclosures is to attract a punishment of rigorous imprisonment upto 7 years.

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