TAX IMPACT ON INDIVIDUALS / HUF / AOP / BOI IN 2016-17 BUDGET PRESENTED YESTERDAY
- No change in income tax rates, no increase in tax exemption Limit.
- First-time home buyers to get additional deduction of Rs 50,000 on interest for loan upto Rs 35 lakh. The cost of house should not be more than Rs. 50 lakh.
- Surcharge on income tax for those with incomes exceeding 1 crore per annum raised from 12% to 15%.
- Relief u/s 87A- Ceiling of tax rebate for tax payers with up to Rs 5 lakh annual come raised to Rs. 5,000 from Rs. 2,000 currently.
- Deduction under Section 80GG for individuals paying rent but not receiving HRA proposed to be increased from Rs. 24,000 to Rs. 60,000.
- Tax exemption on withdrawal of 40% from national pension Scheme at the time of retirement.
- 40% Withdrawal from Super Annuation Funds proposed to be tax exempt.
- Dividend Income will be taxed @ 10% for persons/HUFs receiving dividend more than Rs 10 lakh.
- Investment in Sukanya Samriddhi Scheme will be eligible for deduction u/s 80C and any payment from the scheme shall not be liable to tax.
- Increase in the limit of deduction u/s 80D of the Income-tax Act from Rs. 15,000 to Rs. 25,000 on health insurance premium (in case of senior citizen from Rs. 20,000 to Rs. 30,000)
- Increase in the limit of deduction in case of very senior citizens u/s 80DDB of the Income-tax Act on expenditure on account of specified diseases from Rs. 60,000 to Rs. 80,000.
- Increase the limit of deduction u/s 80DD of the Income-tax Act in respect of maintenance, including medical treatment of a dependant who is a person with disability, from Rs. 50,000 to Rs. 75,000. It is also proposed to increase the limit of deduction from Rs. 1 lakh to Rs. 1.25 lakh in case of severe disability.
- Capital gains not to be taxed if invested in select categories.
- Increase in the limit of deduction u/s 80CCD of the Income-tax Act on account of contribution by the employee to National Pension Scheme (NPS) from Rs. 1 lakh to Rs. 1.50 lakh. It is also proposed to provide a deduction of upto Rs. 50,000 over and above the limit of Rs. 1.50 lakh in respect of contributions made to NPS.
- Transport allowance exemption is being increased from Rs. 800 to Rs. 1,600 per month for salaried personnel’s.