Income tax relief for small taxpayers

Income tax relief for small taxpayers

Income tax relief for small taxpayers

The Budget for 2016-17 proposed no change in income tax slabs or I-T exemption limit for the salaried class, but increased relief for taxpayers by raising the ceiling of tax rebate to Rs 5,000 from the existing Rs 2,000 for individuals with total income of less than Rs 5 lakh.

Finance Minister Arun Jaitley said the move will help more than two crore taxpayers.

“I propose to raise the ceiling of tax rebate under section 87A from Rs 2,000 to Rs 5,000. There are two crore tax payers in this category who will get a relief of Rs 3,000 in their tax liability.”

The Budget also proposed to increase the limit of deduction in respect of rent paid under section 80 GG from Rs 24,000 per annum to Rs 60,000 per annum.

People who do not have a house of their own and do not get any house rent allowance from the employer, got a deduction of Rs 24,000 per annum from their income to compensate them for the rent they pay.

Jaitley also announced an additional deduction of Rs 50,000 on interest paid by the first-time home buyers on home loans of up to Rs 35 lakh, provided the house value doesn’t exceed Rs 50 lakh.

However, those earn more than one crore per annum will have to pay more taxes as surcharge has been raised from 12 per cent to 15 per cent.