First: There is a push for Financial Transparency and Efficiency in delivering subsidies by making the payment process more digital. Statutory backing for Aadhaar will be a game changer. Paperless will democratise finance, cut inefficiency and fraud. Digital depository of academic certificates is a great step towards paperless financial services.
1. The subsidy scheme and the social security scheme will be automated and Aadhar-based, thereby increasing the role of the digital in the financial sphere.
2. The government is also considering computerised processing to resolve fraud cases.
3. The government is also planning to set up a digital depository for school leaving certificates, college degree certificates, mark sheets, etc. The depository would be along the lines of a securities depository, which would help authenticate their validity, increasing the trust factor. BankBazaar foresees the extension of this facility to govt-issued KYC documents, pushing up financial inclusion.
Second: The budget is named directional by the FM. There were tax savings for the common man, such as:
1. The deduction limit under Section 87A of the Income Tax Act raised from Rs 2,000 to Rs 5,000 per annum. This section applies to those with total income of less than Rs. 5 lakh.
2. Relief for taxpayers who do not own a house and don't get house rent allowance from employers raised from Rs 24,000 per year to Rs 60,000 per annum under Section 80GG.
3. Deduction of Rs 50,000 on interest paid by first-time home buyers on home loans of up to Rs 35 lakh, provided the house value doesn't exceed Rs 50 lakh.
4. NPS made partially tax-free with no tax on withdrawals of up to 40% on maturity.
Third: To boost the investment environment, the government also increased the focus on affordable housing, with a mandate of 22 million homes by 2022. With this in mind, it has waived off service tax for houses being built in less than 40 sq meters in the four metros, and for houses being built in less than 60 sq meters in non-metros.Finance minister proposed a 100 per cent deduction for profits to an undertaking from a housing project for flats up to 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019, and is completed within three years of the approval. Minimum Alternate Tax will however apply to these undertakings.