Union Budget 2016-17: Income Tax relief to the common man - MYREALITY.In, Real Estate, Share Market, Mutual Fund, Insurance
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Friday, March 04, 2016

Union Budget 2016-17: Income Tax relief to the common man

Union Budget 2016-17: Income Tax relief to the common man
   
The basic exemption limit was left unchanged although there were expectations that it would increase from Rs. 2.50,000 to Rs 3.00,000 leaving a higher disposable income in the hand of the common man.
But in order to lessen tax burden on individuals with income not exceeding Rs 5 lakh, it is proposed to raise the ceiling of tax rebate under Section 87A from Rs. 2,000 to Rs, 5,000 providing a relief to about 2 crore tax payers in this category who will get a relief of Rs. 3,000 in their tax liability.
   
In order to provide relief to ‘first – home buyers’, the Finance Minister, Mr Arun Jaitley also proposed 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.
  
PF rate for new employees..!
 To incentivise creation of new jobs in the formal sector, it has been proposed that 8.33% shall be paid on EPF contribution for all new employees enrolling in EPFO for the first three (3) years of their employment.
This has been done with the objective of incentivising the employers to recruit unemployed persons and also to bring into the books the informal employees like semi-skilled & unskilled workers drawing salary less than Rs. 15,000 per month.

Benefit for pensioners..!
Recognising the importance of Pension Funds for the livelihood of senior citizens, it is proposed to make 40% of the retirement corpus accumulated through National Pension System (NPS) tax free on retirement.
 
On the closure of NPS account referred to under Section 80CCD of the Income-tax Act, 1961 any amount received by the nominee on the death of the employee is proposed to be exempt.

Likewise, for Recognised Provident Fund and Superannuation Funds 40% of corpus is proposed to be tax free for contributions made after 1.4.2016.
    
In order to encourage purchase of single premium annuity plans, it is proposed to reduce service tax from 3.5% to 1.4% of premium paid.
It has also been proposed that the annuity which goes to the legal heir after the death of pensioner will not be taxable.

Benefit for investors..!

In order to provide boost to Sovereign Gold Bond Scheme (issued by RBI), it is proposed that there will be no long term capital gain tax on the Scheme.
Further, it is been proposed to provide for indexation benefit at the time of transfer of Sovereign Gold Bonds.
    
Similarly it is proposed that, interest earned on Deposit Certificates issued under Gold Monetisation Scheme, 2015 and capital gains arising from them shall be exempt from tax.
    
For rupee denominated bonds it is proposed that any gains arising on account of appreciation of rupee against a foreign currency at the time of redemption of these bonds of an Indian company subscribed by a non-resident be exempt from capital gains tax.

In case of transfer of units under merger or / consolidation of plans of a mutual fund (mf) scheme shall be exempt from capital gains tax.
   
In case of demerger or /  amalgamation of a company, the acquisition of shares by an individual or /  HUF shall not attract tax liability under section 56(2)(vii) of the Income-tax Act.

    
Union Budget 2016-17: Income Tax relief to the common man Reviewed by S. Chitra on March 04, 2016 Rating: 5 Union Budget 2016-17: Income Tax relief to the common man     The basic exemption limit was left unchanged although there were expectat...

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