Finally our budget for the financial year is out. Finance Minister of India, Arun Jaitley presented the Union General Budget for 2015-16 in Parliament. Though there are few changes in the tax structures, the Personal Income Tax rates are untouched. Here is a broad view on the Income Tax rates set for FY 2015-16.
|Income up to 250000||Exempted from Income Tax|
|250001 to 5 Lakhs||10% Tax|
|500001- 10 Lakh||20% Tax|
|Above 10 Lakhs||30% Tax|
These rates are applicable citizens of both sex who are less than 60 years old.
Senior citizens who are above 60 years of age are exempted from income tax up to 3 lakh limit instead of 250000. Very senior citizens – who are aged above 80 years – are exempted from income tax up to 5 lakh so they need to pay income tax on income above 5 lakh at the rate prescribed for people in the general category.
The education cess and additional surcharge – known as Secondary and Higher Education Cess – on income tax for the year 2015- 16 are going to be at 2% and 1% respectively. These charges would be levied from all tax payers. HUFs, artificial juridical persons, AOPs, co-operative societies and firms whose income exceed 1 crore are liable to pay 12% surcharge on their income tax amount.
Let us now look at the tax deductions offered in this budget.
- Section 80C limit is untouched and kept at Rs.150000 limit. However, section 80CCD limit is hiked from Rs. 1 lakh to Rs. 150000 for new pension scheme.
- There is a considerable change in section 80D on health insurance premium limit. Under section 80D, deduction up to Rs. 25000 is allowed for general category people and Rs. 30000 for senior citizens. The existing rates for general category people and senior citizen people are Rs. 15000 and Rs. 20000 respectively. In case of very senior citizen people no exemption is allowed as of now but they are eligible for a deduction of Rs. 30000 towards medical expense.
- PAN number is a must for any transaction above Rs 1 Lakh.
- Sukanya Samridhi Account Deposit Scheme becomes more attractive investments than PPF now as all interest earned from this scheme and maturity amount are exempted from tax. So the investments made under this scheme fall under exempt- exempt – exempt tax category.
- Income deduction on account of interest on home loan is up to Rs. 2 lakh. Transport allowance exemption limit is hiked in the current budget from its existing limit of Rs. 800/month to Rs. 1600/month.
- Big hike on service tax rate. It is hiked from existing 12.36% to 14%. This hike is definitely going to effect business of all service sector companies. Wealth tax is replaced by 2% additional surcharge on taxable income above 1 crore rupees. Senior citizens are eligible for service tax exemption on Varishta Bima Yojana scheme.
- 100% tax deduction on the amount contributed towards Swachh Bharath and clean Ganga activities. Under Section 80U, differently abled people can get deduction up to Rs. 75000. The existing limit under this Section is Rs. 50000. In case of severe disability, the limit remains same at Rs. 1 lakh but it is proposed to hike the limit to Rs. 125000/-
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