For individual tax payers the budget 2016 has proposed three major tax changes:
– Increase in surcharge from 12% to 15% on income tax payable by individuals with total income over Rs 1 crore.
– Tax rebate for those with income up to Rs 5 lakh has been hiked by Rs 3000; and extended the tax deduction available to those taking housing loans for FY 16-17 with some changes in the conditions required to be met to avail the deduction.
– U/S 87A, approximately 2 crore tax payers to get additional relief of up to Rs 3,000 in case of income under Rs 5 lakh. At present for the FY’16 the relief is Rs. 2000, which has been increased to Rs. 5000 for the FY’17.
– A deduction of upto Rs. 50,000 has been proposed for an individual on account of interest paid for the loan taken to purchase a residential house, where the home loan amount doesn’t exceedRs 35 lakh and the value of the property doesn’t exceed Rs. 50 Lakhs. Further FM mentioned that this deduction will be available only to the assessee purchasing home for the first time.
– Amount of deduction under section 80 GG has been increased from 24,000 p.a. to Rs. 60,000 p.a.
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