Our FM had delivered his bag of tax goodies last year in the form of a higher exemption limit and a higher Section 80C limit. In this budget while there were no big ticket direct tax items – the FM announced that the tax payers will now enjoy tax exemptions worth Rs 4,44,200 from their income. That sounded like a whole lot of exemptions during the Budget speech!
A close look at the FM’s break up of Rs 4,44,200 reveals that most of these exemptions are not new. Neither is this list of exemptions exhaustive (a plethora of deductions are available under section 80) and several deductions have not been considered – and for all purposes this is a loose number. The only increase in these is deduction of Rs 50,000 for NPS contributions as well as a doubling of exemption for transport allowance.
Here’s what he meant by this number for financial year 2015-16, and a comparative of financial 2014-15 against them.
|Deduction u/s 80C||1,50,000||1,50,000|
|Deduction u/s 80CCD||50,000|
|Deduction u/s 24 on home loan interest||2,00,000||2,00,000|
|Deduction u/s 80D||25,000||15,000|
|Transport allowance Exemption||19,200||9,600|
While these announcements and other tax measures FM spoke of shall bring some tax relief, there are many smart ways to maximize your savings and make the most of what you earn. Find out how these changes will bring you tax relief here.