Union Budget 2016 comes as a mixed bag for individual taxpayers. The Finance Minister aptly struck the right chord by not touching income tax slab rates but increasing his tax kitty by playing other smarter tactics. Whereas on one hand, he offered relief to individual taxpayers, on the other hand, he adopted a tough stand to tax the high networth individuals.
Let’s have a close look on how individuals are affected by the Union Budget 2016-17:
|1) Rate of surcharge is being increased to 15% from 12%, if your total income exceeds
Rs. 1 crore.
|2) Relief under Section 87A is proposed to be raised from Rs. 2,000 to Rs. 5,000 if total income of a resident individual does not exceed Rs. 5,00,000. This means you save Rs 3,000 in taxes this year.|
|3) Dividend income is exempt under section 10(34). However, the Finance Bill proposes an additional tax at the rate of 10% on gross amount of dividend income received from domestic company, if the amount of dividend exceeds Rs. 10 lakhs per annum.|
|4) Additional deduction up to Rs. 50,000 is proposed under section 80EE in respect of interest on housing loan to the first time individual buyers of a residential house property. This is applicable if you are a first-time buyer of a home, and are taking a loan up to Rs 35 lakh, (value of house should not exceed Rs 50 lakh)|
|5) Maximum deduction under section 80GG for individuals paying house rent but not receiving HRA shall be increased from Rs 24,000 to Rs. 60,000 per annum.|
|6) Time-limit to acquire or construct house property to claim deduction of interest on housing loan under section 24(b) has been proposed to be increased from 3 years to 5 years.|
|7) A new Section 54EE is proposed to provide exemption up to Rs. 50 lakhs for long-term capital gains invested in units of funds set-up by Government to promote start-ups.|
|8) Filing of return is now mandatory, even if entire income is exempt from tax under Section 10(38). However, in such case total income should exceed maximum exemption limit without giving effect to the provisions of Section 10(38).|
|9) Currently, belated return can be filed at any time before the expiry of 1 year from the end of the relevant Assessment Year. Now, it is proposed that belated return cannot be filed after expiry of relevant Assessment Year.|