So it's that time of the year again, when the start of the financial year and the budget 2016 collide. With bated breath and the all important question, “What does this mean for me?” is something we're attempting to lend clarity to. This article touches upon the budget highlights that could directly affect you, the tax-payer.So, what does this mean for you?
Relief on rebate: Those with income not exceeding Rs. 5 lakh will now have their ceiling on tax rebate under 87A, raised from Rs. 2,000 to Rs. 5,000. The two crore tax payers who fall in this category will get a relief of Rs. 3,000 in their tax liability.
Relief for consultants: Those who don't own a house, nor get HRA from an employer, now have an increased deduction to compensate for rent paid under section 80GG from Rs. 24,000 to Rs. 60,000/ annum.
Relief for home loans: First-home buyers will now get a deduction for additional interest of Rs. 50,000/ annum for loans up to Rs. 35 lakh sanctioned during the next financial year, provided the value of the house does not exceed Rs. 50 lakh.
Relief for NRIs: Currently, those NRIs without a PAN card are subjected to a higher rate of TDS. Under the proposed amendment, should they furnish alternative documents, the higher rate will not apply.
Relief for employers & employees: In an effort to incentivize creation of new jobs in the formal sector, the Government will now pay the EPS contribution (8.33%) on behalf of the employer for all new employees enrolling in EPFO, for the first three years. This is applicable for those with a salary up to Rs. 15,000/ month.
Surcharge: Individuals with an income above Rs. 1 crore will now have to pay a 15% surcharge, up from 12%.
We hope this provides some solace amidst the cloud of confusion and information overload. Remember, it's good to stay informed because after all, it's your hard earned money. Keep visiting this space for a one-stop update, as it happens. Happy new (financial) year!