New Delhi: Finance Minister Arun Jaitley in his Budget Speech in Lok Sabha today proposed rationalization of various tax exemptions and measures to improve tax administration.
He said the government has provided medium term guidance wherein Corporate tax will be reduced to 25 per cent over the next four years from the existing 30 per cent, with a view to boost spending and job creation.
In his speech, he also announced to abolish the wealth tax and replace it with an additional 2 per cent surcharge on the country's super rich earning Rs.1 crore and above.
To promote health care among individual tax payers, the NDA government proposed to increase the limit of reduction of health insurance premium from Rs 15,000 to Rs 25,000 and for senior citizen this limit is increase from Rs 20,000 to Rs 30,000 under section 80 D of the Income Tax Act
The income-tax slabs remain unchanged. Transport allowance exemption has been increased from Rs 800 to Rs 1, 600 per month which will result in the maximum saving of Rs.2880 per annum
The finance minister also announced the limit on deduction on account of contribution to a pension fund and the new pension scheme to be increased from Rs 1 lakh to Rs 1.5 lakh. This Additional deduction of Rs 50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD.
He said the individual taxpayers can benefit up to Rs. 4.44 lakh from fresh exemptions.
Here is the mathematics behind this figure:
• Deduction u/s 80C – Rs 1,50,000 (same as last year)
• Deduction u/s 80CCD - Rs 50,000 (Increased in the budget)
• Deduction on account of interest on house property loan (Self occupied property) - Rs 2,00,000 (same as last year).
• Deduction u/s 80D on health insurance premium - Rs 25,000 (increased in the budget)
• Exemption of transport allowance - Rs 19,200 (increased in the budget)
Total – Rs 4,44,200