Income Tax 2015-16 – Changes relevant to Salaried Employees
Income Tax 2015-16 – Changes relevant to Salaried Employees in Budget 2015
While Finance Minister termed Budget 2015-16 as a growth oriented one with due attention to common and poor in India, there were not much changes as far as Income Tax 2015-16 in respect of salaried employees are concerned. Personal Income Tax Rates were untouched and as a result Salaried Class will have to pay same Income Tax that they paid last year.
However, following changes have been effected with regard to deductions / exemption allowed from total income of Salaried Employees under various Sections Income Tax Act by which quantum of Income Tax payable this year may get reduced if an employee is eligible for such deduction / exemption.
Sukanaya Samriddhi Scheme made eligible for deduction under Section 80C
Individuals who are subjected to Personal Income Tax Provisions can now save Sukanaya Samriddhi Scheme, a newly started savings scheme with a view to encourage savings in the name of girl child’s education and marriage, for the purpose of claiming deduction under Section 80C
Additional Income Tax Exemption in respect of Health Insurance Premium under Section 80 D:
Medical expenditure is getting increased day by day and however awareness towards Health Insurance is very minimal in India. In order to make Health Insurance Schemes more attractive and to cover entire health insurance premium paid by an employee for the purpose of deduction under Section 80 D, limits of Health Insurance Premium for covering individual and a senior citizen for the purpose of Income Tax Exemption have been increased to Rs. 25,000 and Rs. 30,000 respectively.
Moreover, as far as very senior citizens (aged 80 years or more) are concerned any payment made on account of medical expenditure up to Rs. 30,000 would be eligible for deduction under Section 80D.
More Deduction under Section 80DD for very senior citizens (increased from Rs. 50,000 to Rs. 80,000)
While an individual is eligible to deduct up Rs. 50,000 which was spent towards medical expenditure under Section 80DD, budget 2015 has brought out an additional provision under this section to allow deduction of Rs. 80,000 for very senior citizens.
The condition of producing certificate from a medical doctor under Section 80DDB has been relaxed and it is enough the tax payer produces a prescription from a specialist doctor.
Additional Income Tax Exemption for Persons with disability under Section 80U:
In view of the rising cost of medical care and special needs of a disabled person, it is proposed to amend section 80DD and section 80U so as to raise the limit of deduction in respect of a person with a disability from Rs. 50,000 to Rs. 75,000.
It is also proposed to raise the limit of deduction in respect of a person with severe disability from Rs. 1 lakh to Rs. 1.25 lakhs.
Limit under Section 80CCD and Section 80CCC for contribution in NPS and other pension funds raised
With an agenda to promote social security measures and to bring the existing provision in line with the recently increased overall limit of Rs. 150,000, the deduction for contribution to certain pension funds under section 80CCC has been increased to Rs. 150,000 from present Rs. 100,000.
Also, an additional deduction under section 80CCD to the extent of Rs. 50,000 has been introduced for contributions under the National Pension Scheme.
Deduction towards Transport Allowance increased from Rs. 800 to Rs. 1600 per month
The long due increment in the monthly travel allowance has now finally materialized. In order to commensurate with the increased costs of transportation, it is now proposed to be double the original transport allowance and it shall stand at Rs. 1,600 per month.
Source: Finance Bill 2015
Sir,
I expected the finance minister to release the money saved by present senior citizens-some of them octogonarians eveb. before their retirement in the so called NSS 87 scheme the deoposits made under this NSS 67 scheme which qualified for 100 % deduction from income acquired then,for tax calcuilation at that time when the max tax rate was 30% or even 40% ,if I recall from my memory. Now senior citizens like me in their age nearing 80’s can not with draw that money after over 20 years even,except with 20% cut for tax at the time of withdrawal !!! Even if I am in 10% tax braket,I have to pay the 20% tax for any money sought to be with drawn from the accumulated fund in NSS pass book maintained by post office which gains hardly 7% interest now!!!>. Instead of using such savings made by to day’s very senior citizens for the so called people’s benefits in budget pronouncements,why not the Govt be gratious enough to release such holdings to the surviving pensioners who need that fund for their basic necessities at that age!!! Atleast after 15 years after retimemt when the Govt pensioners are eligible for their commutation amount to be restored ,this saving of the old pensioners can be magnanimously released to them .Afterall,it belongs to them!!!.The tax saving benefit then extended to them should not be taken too far to penalise them at their old age now !!! The press release subsequently given that the fund will be tax free in the hands of the nominees after the holders’ death is no big sacrice by the Govt !!! Can The GOVt get a rethimking on this request from a senior ctizen pensioner at the age of past 76 years!! Can the G connect team take up this issue to the Govt for their release of this accumulated funds back to its owners without further preconditions!!!? Pl give your feed back. Thanks Dr.P.srinivasulu
Government employees can’t escape but so many ways for corporates
there is no relief for the salaried class. the much hyped election promise of abolition of income tax has not even been examined not even a whisper in this regard. Atleast to start with salaried persons can be exempt from I.T, atleast those drawing salaries of less than Rs.10 lacs per annum could have been exempted before moving towards complete abolition of IT. A huge disappointment.