Budget 2016 Income Tax Exemption Cheat Sheet: With FM Arun Jaitley all set to present the Union Budget 2016-17 on February 29th, the question on all taxpayers’ minds is what will they gain from changes in income tax exemptions, if any are allowed by the Narendra Modi govt. At a time when there are expectations that the government may bring down the corporate tax rate, salaried employees would expect some tax relief from the finance minister so that they have more disposable income in their hands.
At present (FY16), the government allows individuals below 60 years or Hindu Undivided Family (HUF) earning up to Rs 2.5 lakh a year not to pay any tax, those earning between Rs 2.5 to 5 lakh a year pay tax at the rate of 10%; between Rs 5 to 10 lakh at the rate 20% and those above Rs 10 lakh a year at 30%. Here is 1 assumption we are making based on our readers’ wish list. Find out how much you can save based on these assumptions!!
So, if FM Arun Jaitley on Budget 2016 presentation day increases the income tax slab rate by Rs 50,000, like the way he did in February 2014 for FY15, then individuals below 60 years with an annual income from Rs 5 lakh to 1 crore, at one stroke can save Rs 5,150 a year. Individuals earning above Rs 1 crore a year can save a bit more – Rs 5,665 a year. At present, individuals earning up to Rs 2.5 lakh do not have to pay any tax. From Rs 2.5 to 5 lakh the tax rate is 10%; between 5 to 10 lakh it is 20%. And for income above Rs 10 lakh, the tax rate is 30%.
Check out in the table below, the Union Budget 2016 Income Tax cheat sheet and find out everything you need to know even before FM Arun Jaitley has spoken a word: