Union Budget 2016


All that matters to you

Overview

 

It’s that time of the year when tax payers - both corporates and individuals wait anxiously to hear from the honourable Finance Minister. Union budget - 2016 was announced on 29th February. 

Finance Minister Arun Jaitley’s third budget under this term is a mixed bag for taxpayers. There are several points to consider to ensure taxpayers have the right information to plan their taxes. We have put together some of the important announcements that were made during the budget rollout. We are organizing a webinar with our tax expert to take you through these announcements and clarify any doubts that you might have. Alternatively you can also ask any questions on the “Ask your question” form. Our tax expert will respond to you with a detailed clarification.

Income tax

 Individuals below 60 years

S.no Income tax slabs Tax Rates
1 Upto ₹ 2,50,000 NIL
2 ₹ 2,50,000 to ₹ 5,00,000 10% of the amount by which the taxable income exceeds ₹ 2,50,000.
3 ₹ 5,00,000 to ₹ 10,00,000 ₹ 25,000 + 20% of the amount by which the taxable income exceeds ₹ 5,00,000.
4 Above ₹ 10,00,000 ₹ 1,25,000 + 30% of the amount by which the taxable income exceeds ₹ 10,00,000.
 

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 Senior citizens (between 60 to 80 years)

S.no Income slabs Tax rates
1 Upto ₹ 3,00,000 NIL
2 ₹ 3,00,000 to ₹ 5,00,000 10% of the amount by which the taxable income exceeds ₹ 3,00,000.
3 ₹ 5,00,000 to ₹ 10,00,000 ₹ 20,000 + 20% of the amount by which the taxable income exceeds ₹ 5,00,000.
4 Above ₹ 10,00,000 ₹ 1,20,000 + 30% of the amount by which the taxable income exceeds ₹ 10,00,000.
 
 

 Senior citizens (above 80 years)

S.no Income Slabs Tax Rates
1 Upto ₹ 5,00,000 NIL
2 ₹ 5,00,000 to ₹ 10,00,000 20% of the amount by which the taxable income exceeds  5,00,000.
3 Above ₹ 10,00,000 ₹ 100,000 + 30% of the amount by which the taxable income exceeds ₹ 10,00,000.
 

Notes

  • The education cess and higher education cess remain the same @ 2% and 1% respectively.
  • Tax rebate under section 87A has increased to ₹ 5000 (from 2000) for individuals who have an annual income of upto ₹ 5 lakhs. (This is not applicable to the senior citizen (above 80 years) group of taxpayers).
  • Surcharge rates have been increased 15% (from 12%), if income exceeds ₹ 1 crore

 Chapter VI - Deductions

Section 80GG (Rent paid deduction):

The amended rules state:

Assessees can claim rent paid not exceeding five (earlier two) thousand rupees per month or twenty-five per cent of his total income for the year (whichever is less) under this section if the following conditions are complied with:

  • No HRA component in salary structure
  • Neither the assessee, spouse, or minor child should not own any house in their names. Also, the assessee must not own any other place or accommodation in the occupation of the assessee.

 TDS

192A (TDS on PF withdrawal) :

  • No deductions under this section shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee is less than Fifty (earlier thirty) thousand rupees.