Main Points Related to Tax

Income Tax Slab Remains Unchanged

The basic exemption remains at 2.5 lacs. There is no extra concession for females.

Tax Deduction for the Rent Payment (u/s 80GG) has increased from 24,000 to 60,000

Finance Minister has increased the tax deduction limit u/s 80GG to Rs 60,000 per annum from the current Rs 24,000 on the housing rent.

Tax Rebate Increased u/s 87A increased from Rs. 2000 to Rs.5000

The income tax rebate has been enhanced by Rs 3000. In the budget 2016, the finance minister has increased the tax rebate given to individuals with net income equal to or less than Rs 5 lakh under section 87A from Rs 2000 to Rs 5000.

This amendment will take effect from 1st April, 2017 and will accordingly apply in relation to assessment year 2017-18 and subsequent assessment years. This rebate is deducted from the total tax accrued & not the taxable income.

Surcharge rate increased from 12% to 15% on income of Rs 1 crore or more

The income tax surcharge is levied on the taxpayers who earns more than Rs 1 crore in a year. Budget 2016 has increased the burden of surcharge from existing 12% to 15% for them. The surcharge for all other categories of the taxpayers would remain same.

First time home buyers to get additional deduction of Rs 50,000 on interest for loan upto Rs 35 lakh

For the first-home buyers FM propose to give deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned during the next financial year, provided the value of the house does not exceed Rs 50 lakh.

At present, Rs 2,00,000 deduction is allowed for interest paid on home loans.

The home buyer would have the opportunity to claim more tax deduction. The budget 2016 has increased the tax deduction for home loan interest by 50 thousand. This extra deduction of 50,000 would be available over and above the 80C limit of Rs 1.5 lac.

No capital gains tax on redemption of gold bonds

Budget 2016-17 provide that redemption by an individual of Sovereign Gold Bond issued by Reserve Bank of India under Sovereign Gold Bond Scheme, 2015 shall not be charged capital gains tax.

Government has also proposed to provide indexation benefits to long terms capital gains arising on transfer of Sovereign Gold Bond to all cases of assessees.

No Capital Gains Tax On the Earning from Gold Monetisation Scheme

The government would not charge any capital gains tax on the interest income of gold monetization scheme. The gold monetization scheme was launched to channelize the idle household gold.

NPS Withdrawal Tax Exemption

The biggest hurdle of NPS is the tax on withdrawal. Because of the tax during withdrawal, The NPS subscribers were in disadvantage compared to the EPF and PPF members. Now Government has tried to reduce this anomaly. The 40% withdrawal of NPS would exempt from the tax. Along with this the NPS wealth given to the nominee after the death of subscriber would be 100% exempt from the tax.

No tax would be deducted at source for PF withdrawals of up to Rs 50,000

No tax would be deducted at source for PF withdrawals of up to Rs 50,000 from June 1,2016.The government has notified raising the threshold limit of PF withdrawal for deduction of tax (TDS) from existing Rs 30,000 to Rs 50,000.

Tax deduction limit up Rs 50K for investment in pension fund

Exemption limit is proposed to be increased from Rs 1 lakh to Rs 1.5 lakh for annual contribution by an employer to superannuation fund.

 

 

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