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Saturday, February 28, 2015

Benefits to Middle Class Tax Payers in the Budget 2015-16

Benefits to Middle Class Tax Payers in the Budget 2015-16

Payments to the Beneficiaries Including Interest Payment on Deposit in Sukanya Samriddhi Scheme to be Fully Exempt

The Union Minister of Finance Shri Arun Jaitley in his Budget Speech in Lok Sabha today proposed rationalization of various tax exemptions and incentives to reduce tax disputes and improve tax administration. He said, with a view to encourage savings and to promote health care among individual tax payers, it is proposed to increase the limit of reduction of health insurance premium from Rs.15,000 to Rs.25,000 and for senior citizen this limit is increase from Rs.20,000 to Rs.30,000.

For senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for Rs.30,000 toward medical expenditure.  Deduction limit of Rs.60,000 on expenditure on account of specified diseases is enhanced to Rs.80,000 in the case of senior citizens.

Additional deduction of Rs.25,000 is allowed for differently-abled persons, increasing the limit from Rs.50,000 to Rs.75,000. It is also proposed to increase the limit of deduction from Rs.1 lakh to Rs.1.25 lakh in case of severe disability.

The Finance Minister Shri Jaitley also proposed to provide that investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C of the income-tax and any payment from the scheme shall not be liable to tax.

Limit on deduction on account of contribution to a pension fund and the new pension scheme is proposed to be increased from Rs.1 lakh to Rs.1.5 lakh.

 Additional deduction of Rs.50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD increasing from Rs.1 lakh to Rs.1.5 lakh.
Details of tax deductions proposed are as follows:

Deduction u/s 80C                                                                Rs 1,50,000
Deduction u/s 80CCD                                                           Rs 50,000
Deduction on account of interest on house property loan (Self occupied property)  Rs 2,00,000
Deduction u/s 80D on health insurance premium         Rs 25,000
Exemption of transport allowance                                    Rs 19,200

Total                                                                                       Rs 4,44,200

Source: Pib

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