Moneycontrol
Feb 01, 2017 04:14 PM IST IST | Source: Moneycontrol.com

Budget 2017: Lower income tax works better for the small businessman

Finance minister decided to reduce the income tax burden on the businesses.

Finance Minister Arun Jaitley provided a boost to small businessmen by offering lower income tax rates. Budget 2017 proposed to continue with the scheme of presumptive taxation. Instead of presumptive tax at 8% of the turnover it will be 6% for the turnover received by non-cash means, if the turnover is below Rs 2 crore.

Due to slow economic recovery in India and demonetization in the last quarter of the CY2016, the businessmen community was under pressure. On the individual front, small businessmen may benefit with lower tax for income up to Rs 3.5 lakh, the bigger ones with income more than Rs 50 lakh will see higher income tax due to additional surcharge of 10%.

As the MUDRA lending target is doubled to Rs 2.44 crore for FY2017-2018, the businessmen will find it easy to raise loans for their business. Fiscal prudence by the government will further ensure that the interest rates in the economy will remain low which will help the profitability of the business.

There was also hopes that there would be an increase in service tax exemption limit to Rs 25 lakh. However it did not happen.
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