To start with, let the explain what
exactly has changed in terms of taxation from the year (i.e.AY 2016-17) As per
Budget 2015:
- Tax slabs have not changed
- investment limit under sec. 80C also same as previous FY 2013-14 up to Rs. 1,50,000
Income Tax Slabs
Income tax slabs have been changed this year. Standard deduction limit has been raised to Rs. 2,50,000 for both Male and Female assesses.1) In Case of General Assesses (Both Male & Female):
Income Bracket
|
Rate
|
0 to Rs. 2,50,000
|
0 %
|
Rs. 2,50,001 to Rs. 5,00,000
|
10 %
|
Rs. 5,00,001 to Rs. 10,00,000
|
20 %
|
Above Rs. 10,00,000
|
30 %
|
Income Bracket
|
Rate
|
0 to Rs. 3,00,000
|
0 %
|
Rs. 3,00,001 to Rs. 5,00,000
|
10 %
|
Rs. 5,00,001 to Rs. 10,00,000
|
20 %
|
Above Rs. 10,00,000
|
30 %
|
Income Bracket
|
Rate
|
0 to Rs. 5,00,000
|
0 %
|
Rs. 5,00,001 to Rs. 10,00,000
|
20 %
|
Above Rs. 10,00,000
|
30 %
|
**No surcharge above 10 lacs.
Income Tax Exemptions:
1) Section 80 C Limit – Unchanged this year (to Rs. 1,50,000)
- Deduction on premium paid for a life insurance policy, taken after 1 April 2012, will be allowed only if yearly premium is less than 10% of sum assured. If its more than 10% then it will be not eligible for deduction u/sec. 80C
- ELSS (Mutual Fund)
- PPF (upto Rs. 1,50,000)
- EPF
- FD for 5 years
- Pension Plans
- NSC
- Sukanya Samriddhi Account ( Minor Girl Child Scheme) Max Rs. 1.5 Lakh
- Post Office SB
- Infrastructure Bonds
- Expenditure on Children Education (For upto 2 children only for full time education)
- Tuition fees Maximum allowed is Rs. 1,50,000
- Housing loan principal
- Deferred Annuity
- Approved Super Annotation Fund
- 80CC Raised Up to Rs. 1,50,000 [ Pension Fund ]
2) Section 80CCD - Unchanged this year
Deduction under this section can be claimed only if the contribution to your NPS account is made by your employer and the deduction is limited to a maximum of 10% of your basic salary. Returns on NPS are tax free, but withdrawal is still taxable. The deduction under sec 80CCD is over and above the deduction available under sec 80C.3) Section 80 D –Changed this year
Deduction under section 80D- Deduction of Rs. 25000/- is allowed if the same is paid as premium for Medical Insurance taken for self / dependents or towards preventive health check-up (max Rs. 5000). In case any of self / dependents is a senior citizen, the deduction allowed is Rs. 30000/-
4) Section 80DD – Unchanged this year
Deduction under section 80DD- Exemption given for expenditure made for a disabled dependant towards Medical Treatment/Training/Rehabilitation. It also includes the LIC/Insurance premium paid towards maintenance of such dependant.
- Maximum deduction allowed is Rs. 50,000/- in case of normal disability and Rs. 1 Lakh in case of severe disability.
5) Section 80DDB - Unchanged this year
Deduction under section 80DDB- Exemption given for expenditure incurred on specified disease or ailments such as cancer/aids.
- Maximum deduction allowed is Rs. 40,000/-. In case of Senior Citizens, maximum deduction allowed is Rs. 60,000/-
(i) Neurological Diseases where the disability level has been certified to be of 40% and above,
- Dementia ;
- Dystonia Musculorum Deformans ;
- Motor Neuron Disease ;
- Ataxia ;
- Chorea ;
- Hemiballismus ;
- Aphasia ;
- Parkinsons Disease ;
(ii) Malignant Cancers ;
(iii) Full Blown Acquired Immuno-Deficiency Syndrome
(AIDS) ;
(iv) Chronic Renal failure ;
(v) Hematological disorders :
- Hemophilia ;
- Thalassaemia.
6) Section 80E - Unchanged this year
Deduction under section 80EDeduction is allowed for repayment of interest component of Higher Education loan. All education after Class 12 is allowed, either vocational or Fulltime. But should be from a school/institute/university recognized by the government.
7) Section 80G - Unchanged this year
- Contribution to exempt charities – 25/50/75/100% depending on the charity and as per approval
- 100% exemption on donation to political parties
8) Section 80U - Changed this year
- Deduction upto Rs. 75,000/- is allowed in case of Permanent Disability.
- In case of Permanent Disability exceeding 80%, maximum deduction allowed is Rs. 1,25,000/-.
9) Section 24B & Section 80EE - Unchanged this year
- Housing loan interest. Maximum allowed limit raised to – Rs. 2,00,000 (for loans taken after 1 April 1999. For loans before that Maximum Investment Limit was 30,000).
- Additional deduction of Rs.
1 lac will be applicable to persons taking first home loan of up to Rs. 25 lacs for property worth
upto Rs. 40 lac.
For such persons, the total deduction will be Rs. 2.5 lacs (Rs. 1.5 lac
available under section 24(1)(vi) and Rs. 1 lac available under this new
section 80EE).
10) Superannuation - Unchanged this year
11) Conveyance/Transport Allowance - Changed this year
Any Conveyance / Transport Allowance given to an employee is tax free upto Rs. 1600 /- P.M.12) Medical Allowance - Unchanged this year
Any Medical Allowance given to an employee is tax free upto Rs. 15,000 /- (Supporting Bills required).13) HRA - Unchanged this year
Any House Rent Allowance given to an employee is tax free upto the minimum value of the following conditions (subject to – when an employee can produce rent paid receipts from landlord for the period and if the employee has not availed of tax exemptions for home loan interest / principal repayment):- 50% of Annual Basic (40% of Annual Basic in case of non-metros)
- Actual HRA received
- Rent Paid – (10% of Annual
Basic)
Calculate HRA Exemption U/s 10(13A) with Excel utility
14) Professional Tax - Unchanged this year
Any Professional Tax deducted from an employee’s salary can be reduced from the annual salary income to arrive at taxable salary.15) Provident Fund - Unchanged this year
Provident Fund contributions (under section 80 C and subject to an overall investment limit of Rs. 1,50,000 ) deducted from an employee’s salary are tax exempt.16)80CCG – Direct Equity Investment - Unchanged this year
Under ‘Rajiv Gandhi Equity Savings Scheme‘ – a new equity investor will be able to claim 50% of his investment in direct equity as deduction subject to maximum investment of Rs. 50,000 and provided his taxable income is below Rs. 10 lacs. The investment will be subject to 3 years lock-in.Government has notified this scheme (RGESS). Mutual funds and ETFs that invest in BSE100 or CNX 100 stocks or PSUs which are Navratna, Maharatna and Miniratna will qualify under this scheme. These investments can be traded over stock exchange after 1 year of investment. New equity investor has been defined as someone who has opened a Demat account but has not bought any securities till date of notification of this scheme (22 Sep 2012).
