India Budget 2016 – Highlights

Understanding the business impact

  • Rebate of income tax for resident individuals with total income not exceeding 5 lakh enhanced from 2,000 to 5,000
  • The lower of employer’s contribution to Provident fund in excess of 12% of the salary of the employee or `150,000 p.a. will be subject to tax.
  • Tax rate on newly setup domestic companies engaged solely in manufacture or production of any article or thing proposed to be reduced to 25%, at the option of the company, subject to not claiming certain specified deductions/claims.
  • The Memorandum to the Finance Bill provides that rules for the requirement for maintenance of master file would be prescribed which would be as mandated under OECD BEPS Action 13.
  • Government to continue with the ongoing reform program and ensure passage of GST Bill.


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