Question

    This year’s budget proved the phrase

    “expect the unexpected” from a personal tax perspective. There was much speculation until the budget day regarding reduction in slab rates and other sops for the salaried class. However, the Finance Minister came up with a simple, yet impactful set of proposals to please the common man. The existing tax rate of 10% for income range between ₹ 2.5 lakh and ₹ 5 lakh has been brought down to 5%, which has cheered many. _________________. Ironically, we may not know how much of such 80C deductions could be utilised by the low-income group taxpayers, but still the benefit stands, if the qualifying investments are made to avail the deduction under 80C of the act. Further, this budget also simplified the tax filing process as a one pager return for the salaried class up to a taxable income of ₹5 lakh without any business income. In each of the following question a short passage is given with one of the lines in the passage missing and represented by a blank. Select the best out of the five choices given to make the passage complete and coherent (Coherent means logically complete and sound)
    A Similarly, the threshold for mandatory tax audit compliance has been raised to ₹2 crore, which would ease the compliance burden. Correct Answer Incorrect Answer
    B This, coupled with the existing deduction available under section 80C of the act will ensure that individuals won’t have to pay any income tax up to an income of ₹ 4 lakh. Correct Answer Incorrect Answer
    C With the use of analytics, the Finance Minister made an interesting observation that the effective tax rate of MSME is much higher than that of larger companies. Correct Answer Incorrect Answer
    D This, in spite of the fact that these companies contribute immensely towards economic growth and employment generation. Correct Answer Incorrect Answer
    E The deduction u/s 80CCD towards contribution to NPS has been increased by 20% in respect of self-employed persons from the present 10% which is also a welcome move. Correct Answer Incorrect Answer

    Solution

    This year’s budget proved the phrase “expect the unexpected” from a personal tax perspective. There was much speculation until the budget day regarding reduction in slab rates and other sops for the salaried class. However, the Finance Minister came up with a simple, yet impactful set of proposals to please the common man. The existing tax rate of 10% for income range between ₹ 2.5 lakh and ₹ 5 lakh has been brought down to 5%, which has cheered many. This, coupled with the existing deduction available under section 80C of the act will ensure that individuals won’t have to pay any income tax up to an income of ₹ 4 lakh. Ironically, we may not know how much of such 80C deductions could be utilised by the low-income group taxpayers, but still the benefit stands, if the qualifying investments are made to avail the deduction under 80C of the act. Further, this budget also simplified the tax filing process as a one pager return for the salaried class up to a taxable income of ₹5 lakh without any business income.

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