This post first appeared on ClearTax

Major Updates

Substantial Relief for Low-Income EarnersPeople earning less than 5 lacs in annual income will see relief thanks to an increased tax rebate of Rs.5000. This rebate will be extended under Section 87A.

  1. For Those who don’t Receive HRA – If you don’t receive HRA, you can now claim up to Rs. 60,000 deduction under Section 80GG.
  2. For First Time Home Buyer – Planning to buy a house this year? Rejoice! You can now claim an additional deduction of up to Rs. 50,000 for your home loan this year. But, only if your loan amount is less than 35 lacs and the cost of the house is not above 50 lacs. This will promote affordable housing and reduce the immense stress on residential sectors.
  3. For Home Owners – Do you own a house? Brilliant! Homeowners like you can now claim deductions of up to Rs. 2 lakhs on your home loan interest. Only if you the owner or your family reside in the house property. You can claim this deduction if the construction of the property finishes in 5 years.
  4. More Taxes for the Super Rich – For people with income above 1 crore per annum, the rate of a surcharge of income tax has been increased from 12% to 15% in an aim to tax the super rich. This move aligns with his decision to “spend prudently and wisely for the people, especially for the poor and downtrodden.”
  5. Massive Relief for Start-ups and SMEs – If you are an SME or a startup, you can call 2016 your year! For SMEs under Section 44AD and with an annual turnover of less than or equal to 2 crores, will be able to file taxes with Form ITR 4S (ITR-4S is 2 pages vs. 30 pages for ITR-4).
  6. Easier Tax Filing for Professionals – For professionals providing services, with gross receipts (revenue) up to Rs 50 lakhs can now avail this benefit, too. They will be liable to pay taxes only on 50% of gross receipts and via ITR 4S, as well.
  7. Increased EPF Contribution for New Employees – Are you new to the workforce? You can now have the government pay 8.33% as EPF contribution for the first three years if your salary is less than Rs. 15,000.
  8. Withdrawal Exemption on NPS – If you are planning to retire anytime soon, withdrawal of 40% of your National Pension Scheme (NPS) will be tax exempt, at the time of retirement.

Other Updates

  • Companies Act to be amended to make it easier for start-ups to register companies in a day
  • Budget 2016 to allocated INR 55,000 Cr for roads and highways, summing up to a total investment of INR 97K cr in Road Sector.
  • New credit rating system for infrastructure to be developed.
  • Allocating INR 19,000 Cr in Gram Sarak Yojna.
  • 500 Cr to be allocated to Stand-Up India for SC/ST and Women entrepreneurs.
  • Rs. 100 Cr set aside for higher education financing.
  • INR 30,000 Cr coverage to be provided for senior citizens (above 60 years).
  • Propose to launch a new health care scheme for families with 1 lakh as cover.
  • Approves stand-up India scheme to promote women and SC/ST entrepreneurs with a budget of 500 crores.
  • Jaitley says Indian economy has held it’s strong ground despite a global economic slowdown.
  • GDP growth has accelerated to 7.6%
  • Budget 2016 to focus on GST and bankruptcy code: FM
  • Budget 2016 to focus on infrastructure and enhancing quality of life: FM
  • Budget 2016 will work on tax reforms to reduce burden of compliance: FM

A more exhaustive list can be found on The Hindu.
Read Business Standard‘s coverage of the reactions to the budget from various sections of the Parliament as seen from the Visitor’s Gallery.


 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s