Seven Measures that will make the Tax payer Happy
Seven Measures that will make the Tax payer Happy,check out the Union Budget 2015 now
The honorable Finance Minister (FM) ended his budget speech with the Upanishad-inspired mantra – Om Sarve Bhavantu Sukhinah (OM! May All Be Happy) Let’s try to understand the overall impact of the budget and endeavor to decipher how the FM has really managed to keep the Mango People (Aam Admi) happy.
The FM has not tinkered with the personal tax rates and the income slabs remains the same as compared to financial year 2014-15. However, there are a slew of deductions / exemptions which have been announced which would really interest all of us –
1) Sukanya Samriddhi account scheme -Contributions made under this scheme will be eligible for deduction under Section 80C of the Income Tax Act, 1961 (‘the Act’). Interest on deposits and withdrawal from such scheme are exempt from tax. This showcases the Government’s increased focus on the girl child and commitment towards this worthy cause of upliftment / empowerment of women in our society.
2) Health Insurance/ Medical Insurance – For HUF, contributions to health insurance have been increased from Rs 15,000 to 25,000. Amendment in respect of individuals seems to be unclear to effect the increase.
For senior citizens, the limit has been increased from 20,000 to 30,000.
Therefore, the total deduction available u/s 80D of the Act has been increased to 55,000 from the earlier deduction available of Rs 35,000. This would really help the common man to offset the ever-increasing medical costs which have been exponentially increasing over the years.
3) Medical expenditure for self and dependant (Section 80DDB of the Act) – In the case of resident individuals, the deduction for medical treatment with respect to certain diseases, has been increased from Rs 60,000 to Rs 80,000 in the case of very senior Citizens (80 years or more). The Tax payer is also required to obtain a prescription from a specialist doctor in order to claim this deduction instead of certificate from prescribed Government hospital. This is a welcome and refreshing change which takes into account sophisticated equipment needed which triggers increased costs.
4) Expenditure for the medical treatment / deduction for disabled persons u/s 80DD and 80 U – In the case of an individual or HUF who is resident in India, currently deduction for expenditure for medical treatment including nursing is available upto Rs 50,000 if the person is suffering from disability and Rs 100,000 in the case of severe disability. However, as per the proposed budget, this limit has been increased to Rs 75,000 for the person with disability and to Rs 125,000 in the case of severe disability.
5) Contribution to Pension Scheme u/S 80CCC – A deduction upto Rs 100,000 was available from the total income of an individual who was contributing to the pension scheme. The said limit has been increased to Rs 150,000 in the proposed budget.
However, the overall limit U/S 80 CCE is unchanged i.e Rs 150,000.
6) Contribution to National Pension Scheme (NPS) u/s 80CCD – An additional deduction is proposed for contributions to New Pension Scheme upto an amount of Rs 50,000. This measure is aimed to provide for old age retirement security and is in line with the Government’s vision manifesto to look at retirement benefits for all sections of society.
7) Exemption for Transportation allowance has been increased from Rs 800 per month to Rs 1,600 per month. This would enable all individuals to meet the increasing expenditure incurred on commuting from home to office and vice-versa.
The Budget has also announced that donations made by any donor to the Swachchh Bharat Kosh and donations made by domestic donors to Clean Ganga Fund will be eligible for a deduction of hundred per cent from the total income under section 80G of the Act. Also, the income of Swachh Bharat Kosh and Clean Ganga Fund are exempt from tax. This is a useful measure which encourages public participation at large in the Government’s Swachchh Bharat Abhiyaan.
Considering the compliance burden on the tax payer and administrative burden on the Tax department, it is proposed to abolish the levy of Wealth tax with effect from tax year 2015-16. It is also proposed that information relating to assets which is currently required to be furnished in the wealth-tax return shall be captured by suitably modifying the income-tax return forms. However, the rate of surcharge has been increased from 10% to 12% in the case of persons having a total income exceeding one crore rupees (so super rich have been taxed more from this budget probably as FM feels that they can pay higher taxes). The quoting of TAN has been done away with for certain deductors (HUF) though.
Parallelly, the Government has also armed its focus on measures to curb black money in the country through various measures on the lines of Foreign Account Tax Compliance Act (FATCA) brought in by US Government – aimed at preventing concealment of income and assets and evasion of tax in relation to foreign assets where certain provisions have been incorporated which would enable the enforcement agencies to attach and confiscate unaccounted assets held abroad and launch.
Seven Measures that will make the Tax payer Happy,check out now!
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