However, the budget, which has several measures to strengthen the country's infrastructure and the rural economy economy, includes a slew of measures that would directly impact the common man.
Finance Minister Arun Jaitley, who is battling a fiscal challenge due to the high outgo on account of the 7th Pay Commission and One Rank One Pension (OROP), has left a large section of taxpayers disappointed by leaving the tax slabs unchanged and not providing greater relief from tax burden on those earning above Rs 5 lakhs.
However, the budget, which has several measures to strengthen the country’s infrastructure and the rural economy economy, includes a slew of measures that would directly impact the common man.
On the tax front, if you are earning upto Rs 5 lakhs you can make a saving of Rs 3090 with the raising of the ceiling of tax rebate under section 87A from Rs 2,000 to Rs 5,000.
You can make an additional saving on the deduction for house rent allowance (HRA) under Section 80GG which has been increased from Rs 24,000 to Rs 60,000 for taxpayers. The additoinal tax-saving could be Rs 3,708 for those earning up to Rs 5 lakhs which can go up to Rs 11,124 for those in the Rs 20 lakh category.
If you are a taxpayer stuck with your petition for waiver of interest and penalty taking an unduly long time, the Budget would provide you some relief with Finance Minister Arun Jaitley placing a one year deadline for disposing your petitions.
Jaitley has also proposed to rationalise provision of the Income Tax Act to “improve the cash flow of small tax players who get their funds blocked due to current TDS provision.”
The budget also aims to give a major boost to affordable housing. To make cheaper housing within reach, the budget has provided for deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs 50 lakh. The existing provisions of section 80EE provide a deduction of up to 1 lakh rupees in respect of interest paid on loan by an individual for acquisition of a residential house property. This benefit is available for the two assessment years beginning on the 1 st day of April 2014 and on the 1st day of April 2015.
In a effort to improve the financial landscape for old-age income security, Finance Minister, Arun Jaitely has announced major changes in the taxation structure for pension schemes. In an effort to bring about uniformity in defined benefit and defined contribution pension plans, the budget has proposed that 40% of retirement corpus of a subscriber of National Pension Scheme at the time of retirement will be tax exempt. At present, NPS was under the EET category, with withdrawals being taxable unlike similar scheme such as Public Provident Fund.
Further, annuity payment to the legal heir after the death of pensioner has been made exempt from tax. The annuities provided by NPS and services provided by Employees’s Providend Fund Organisation (EPFO) have been made to exempt from service tax the Annuity services provided by the National Pension System (NPS) and Services provided by EPFO to employees. 27 141.
Single premium insurance policies providing annuity would be cheaper with the Budget reducing the service tax from 3.5% to 1.4% of the premium paid in certain cases.
On the healthcare front, a new health protection plan will be made available to economically weaker section whcih will provide health cover up to Rs 1 lakh per family. An additional Rs 30,000 cover will be available for senior citizens of age 60 years and above.
The Finance Minister has also announced the opening 3,000 outlets under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17 to provide affordable medicine to the common man
In view of the high cost of dialysis, Jaitley has also proposed to start a ‘National Dialysis Services Programme’ where funds will be made available through PPP route under the National Health Mission to provide dialysis services in all district hospitals. Also, certain parts of dialysis equipment would be made exempt from basic customs duty, excise/CVD and SAD to make the overall dialysis process cheaper.