Arun Jaitley, India's Finance Minister, presented the country's Budget 2017 on 1 February 2017.
The Budget proposes to halve the existing
personal income tax rate of 10% for taxpayers earning an annual income
between INR250,000 and INR500,000. A new surcharge of 10% of
tax payable is proposed on individuals whose annual taxable income is between
INR5m and INR10m, while the current surcharge of 15% of tax payable is
retained for those earning more than INR10m.
A simple
one-page income tax return for individuals with taxable income (other than
business income) of up to INR500,000 has been proposed to be introduced.
The Budget also reduces the income tax rate for
smaller companies with an annual turnover of up to INR500m to 25%.
A range of proposals in
the area of international tax law, including new rules on secondary transfer
pricing adjustments, new interest deductibility rules to implement the
recommendations contained in Action 4 of the base erosion and profit shifting
project, and other changes to domestic transfer pricing provisions were also included.
The Budget
also proposes to exempt Category I and II foreign portfolio investors from
indirect transfer provisions and deletes the requirement for offshore funds to
maintain a minimum fund size in the year in which the fund is being wound up to
benefit from the special tax regime for offshore funds.
Detailed changes were not proposed for the current indirect tax regime as there are plans for a new goods
and services tax regime to replace the existing one, tentatively in July 2017.
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