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BUDGET PROPOSALS FOR FY 2017-18
Mr Arun Jaitley , Finance Minister presented his budget proposals for the financial year 2017-18 on 1st Feb , 2017 . If implemented , following aspects of your personal finance :
1.The Income tax rate for individuals in the income slab of Rs 2.5 lakhs to Rs 5 lakhs is reduced to 5 % from existing Rs 10 %
2. The existing rebate of Rs 5000 under section 87 A to the individuals earning between Rs 2.5 lakhs to Rs 5.00 lakhs is reduced Rs 2,500
3.Effectively there would be no tax burden up to income of Rs 3.00 lakhs
4.An additional surcharge of 10 % is levied for persons having annual taxable income between Rs 50 lakhs to Rs 100 lakhs .
5.Set off limit for loss under the head " Income from House Property " to any other income head is restricted to Rs 2.00 lakhs .
6.LIC will implement a scheme for senior citizens which assures pension at an assured return of 8 % per annum for a deposit for 10 year a maximum deposit of Rs 7.5 lakhs . This is in line with PM's announcement in December 2016
7.No cash transaction will be allowed above Rs 3.00 lakhs with certain exceptions .
8.If any cash payments are made more than Rs 10,000 per day towards capital expenditure , such expenditure will be ignored while computing cost of such assets .
9.Any cash payment made to an individual exceeds Rs 10,000 per day , such payments will not be allowed as deduction in computation of income from profits and gains of business / profession .
10.Service charges on rail tickets booked through IRCTC is withdrawn .
1.The Income tax rate for individuals in the income slab of Rs 2.5 lakhs to Rs 5 lakhs is reduced to 5 % from existing Rs 10 %
2. The existing rebate of Rs 5000 under section 87 A to the individuals earning between Rs 2.5 lakhs to Rs 5.00 lakhs is reduced Rs 2,500
3.Effectively there would be no tax burden up to income of Rs 3.00 lakhs
4.An additional surcharge of 10 % is levied for persons having annual taxable income between Rs 50 lakhs to Rs 100 lakhs .
5.Set off limit for loss under the head " Income from House Property " to any other income head is restricted to Rs 2.00 lakhs .
6.LIC will implement a scheme for senior citizens which assures pension at an assured return of 8 % per annum for a deposit for 10 year a maximum deposit of Rs 7.5 lakhs . This is in line with PM's announcement in December 2016
7.No cash transaction will be allowed above Rs 3.00 lakhs with certain exceptions .
8.If any cash payments are made more than Rs 10,000 per day towards capital expenditure , such expenditure will be ignored while computing cost of such assets .
9.Any cash payment made to an individual exceeds Rs 10,000 per day , such payments will not be allowed as deduction in computation of income from profits and gains of business / profession .
10.Service charges on rail tickets booked through IRCTC is withdrawn .
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BUDGET PROPOSALS FOR FY 2016-17 AND YOUR PERSONAL FINANCE
Mr Arun Jaitley , Finance Minister presented his budget proposals for the financial year 2016-17 . If implemented , following aspects of your personal finance may be affected :
1.National Pension System ( NPS ) contributions become more wantable :Till date, the contributions to NPS were exempt from tax at Contribution, exempt on Income but was Taxed at Withdrawal. Now, 40% of your accumulation at the time of withdrawals will be tax exempt.
2. Tax boost for gold schemes : In the Gold Monetisation Scheme, this interest will now stand exempt from tax. The capital gains made on this scheme will also not attract capital gains tax. On the Sovereign Gold Bond Scheme, the interest earned will continue to be taxed. But on redemption, you will not have to pay capital gains tax any longer. If you transfer the bonds before maturity, you will be able to claim indexation benefits on long term capital gains.
3. For first time home buyers : If you are not already owning a house , Deduction for additional interest of Rs. 50,000 per annum has been allowed 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.
4.Tenure increased u/s 24 : For claiming the deduction of interest under section (u/s) 24, for acquisition or construction of self-occupied house property, the time period has been increased from 3 years to 5 years.
5.Tax rebate increased for net income of upto Rs. 5 lakh : In order to lessen tax burden on individuals with income not exceeding Rs. 5 lakh, the ceiling of tax rebate has been increased under section 87A from Rs. 2,000 to Rs. 5,000.
6.Tax relief on rent : The limit of deduction in respect of rent paid under 80GG has been increased from Rs. 24,000 per annum to Rs. 60,000 per annum, which should provide relief to those who live in rented houses.
7.Dividend tax on stock Dividends exceeding Rs. 10 lakh : Stock Dividend incomes greater than Rs 10 lakh in a year for an individual will be taxed at 10%.
8.Additional surcharge on super rich : The surcharge on super-rich (income of over Rs. 1 crore) has been hiked from 12% to 15%.
9. No change in tax slabs/rates : There is no change in the Income Tax Slabs / Rates for Financial Year 2016-17.
10. Revised advance tax payment installments : The advance tax now has to be paid by individuals in 4 installments viz.
15th June15% of the total tax liability
15th September45% of the total tax liability
15th December75% of the total tax liability
15th March100% of the total tax liability
11. Interest part on Recognized Provident Fund (RPF) gets taxed at Withdrawal now : Till date, RPF was entirely tax-free (at the time of withdrawal too). Now, the interest accrued on 60% of the contributions after April 1, 2016 will be taxed while the principal amount will remain tax exempt. This 60% will also be tax exempt if it is invested in a pension annuity scheme.
12. Public Provident Fund (PPF) continues to remain under EEE tax regime. No part of PPF will be taxed and the present scheme of investment up to Rs 1.5 lakh in a year will continue to be tax exempt. PPF on withdrawal will continue to be out of the tax ambit.
1.National Pension System ( NPS ) contributions become more wantable :Till date, the contributions to NPS were exempt from tax at Contribution, exempt on Income but was Taxed at Withdrawal. Now, 40% of your accumulation at the time of withdrawals will be tax exempt.
2. Tax boost for gold schemes : In the Gold Monetisation Scheme, this interest will now stand exempt from tax. The capital gains made on this scheme will also not attract capital gains tax. On the Sovereign Gold Bond Scheme, the interest earned will continue to be taxed. But on redemption, you will not have to pay capital gains tax any longer. If you transfer the bonds before maturity, you will be able to claim indexation benefits on long term capital gains.
3. For first time home buyers : If you are not already owning a house , Deduction for additional interest of Rs. 50,000 per annum has been allowed 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.
4.Tenure increased u/s 24 : For claiming the deduction of interest under section (u/s) 24, for acquisition or construction of self-occupied house property, the time period has been increased from 3 years to 5 years.
5.Tax rebate increased for net income of upto Rs. 5 lakh : In order to lessen tax burden on individuals with income not exceeding Rs. 5 lakh, the ceiling of tax rebate has been increased under section 87A from Rs. 2,000 to Rs. 5,000.
6.Tax relief on rent : The limit of deduction in respect of rent paid under 80GG has been increased from Rs. 24,000 per annum to Rs. 60,000 per annum, which should provide relief to those who live in rented houses.
7.Dividend tax on stock Dividends exceeding Rs. 10 lakh : Stock Dividend incomes greater than Rs 10 lakh in a year for an individual will be taxed at 10%.
8.Additional surcharge on super rich : The surcharge on super-rich (income of over Rs. 1 crore) has been hiked from 12% to 15%.
9. No change in tax slabs/rates : There is no change in the Income Tax Slabs / Rates for Financial Year 2016-17.
10. Revised advance tax payment installments : The advance tax now has to be paid by individuals in 4 installments viz.
15th June15% of the total tax liability
15th September45% of the total tax liability
15th December75% of the total tax liability
15th March100% of the total tax liability
11. Interest part on Recognized Provident Fund (RPF) gets taxed at Withdrawal now : Till date, RPF was entirely tax-free (at the time of withdrawal too). Now, the interest accrued on 60% of the contributions after April 1, 2016 will be taxed while the principal amount will remain tax exempt. This 60% will also be tax exempt if it is invested in a pension annuity scheme.
12. Public Provident Fund (PPF) continues to remain under EEE tax regime. No part of PPF will be taxed and the present scheme of investment up to Rs 1.5 lakh in a year will continue to be tax exempt. PPF on withdrawal will continue to be out of the tax ambit.
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