Finance Minister Arun Jaitley had announced incremental tax
benefits for common taxpayers in his recent Budget 2016
Here are some income tax changes that experts expect in the
budget:
1) The basic income tax exemption limit should be
raised from Rs. 2.5 lakh for male & female below
60 years age.
2) The current
deduction limit of Rs. 2 lakh on
home loan interest paid U/s 24B during a financial year is too & Additional
Section 80EE where can get more Home Loan Interest Max Rs. 1.5 Lakh excluding
U/s 24B.
3) A separate section for deduction on the principal
paid on home loan should be introduced. Home loan principal repayment deduction
is currently clubbed with other options under Section 80C, which has a ceiling
of Rs. 1.50 lakh.
4) Home buyers can currently avail home loan interest
deduction only after the completion of construction of property. In case
construction is not complete within 3 years, the deduction is reduced to Rs. 30,000 per year from Rs. 2 lakh under current norms. This needs
to be changed, given widespread construction delays.
5) The limit of Section 80C of Rs. 1.5 lakh which raised and linked to
the Additional exemption U/s 80CCD(1B) Max. Rs. 50,000/- income-level of tax
payers as some of the compulsory contributions like employee provident fund
leave very little scope for other investments for people falling in highest tax
bracket up to Rs. 2 Lakh.
6) Medical
Insurance U/s 80D has raised the Max. limit of Rs. 25,000 per annum & Rs. 30,000/-
for Sr.Citizen
7) The travel
allowance, which is raised to Rs. 1,600 per
month from Rs. 800 & Rs. 3200/- P.M. for above
80% Phy.disable persons.
8) The New Pension
Scheme (NPS) should be made tax-exempt on withdrawal on the lines of other
investments like PPF, insurance policies etc.
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