Benefit from the Income Tax sops announced by the Government..?

Benefit from the Income Tax sops announced by the Government..?

In the 2014-15 Budget that was presented recently, it was announced that the income tax exemption slab will be being raised from Rs. 2 lakhs per annum to Rs. 2.5 lakhs.

On July 10, during the parliamentary session, while presenting  the budget for the year 2014-15, Finance Minister Arun Jaitley announced that the non-taxable income slab for individual tax payers has been raised from Rs. 2 lakhs to Rs. 2.5 lakhs. Also, the maximum tax exemption of Rs. 1 lakh Under Section 80C has been raised to Rs. 1.5 lakh. Interest deductions on home loan have been increased from Rs. 1.5 lakhs to Rs. 2 lakhs.

Let us now make approximate calculations about the kinds of benefits that taxpayers stand to get from these changes:

Raising the non-taxable income limit from Rs. 2 lakhs to Rs. 2.5 lakhs gives a maximum tax savings of Rs. 5600 additionally.

Since the maximum tax exemption under Section 80C has been raised to Rs. 1.5 lakhs, the tax payer gets to save Rs. 17,000 under certain exemption categories.

Since the maximum exemption under home loan deduction has been raised from Rs. 1.5 laksh to Rs. 2 lakhs, the taxpayer saves another 17,000.

Upto Rs. 2,50,000
Rs. 2,50,001 to Rs. 5,00,000	10 per cent.
Rs. 5,00,001 to Rs. 10,00,000	20 per cent.
Above Rs. 10,00,000	30 per cent.

(ii)  For persons of Age between 60 Years to 80 Years

Upto Rs. 3,00,000
Rs. 3,00,001 to Rs. 5,00,000	10 per cent.
Rs. 5,00,001 to Rs. 10,00,000	20 per cent.
Above Rs. 10,00,000	30 per cent.

(iii)  For persons having Age of 80 Years or More

Upto Rs. 5,00,000
Rs. 5,00,001 to Rs. 10,00,000	20 per cent.
Above Rs. 10,00,000	30 per cent.

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Income Tax Structure 2014-15 announced in Budget 2014

Income Tax Structure 2014-15 announced in Budget 2014

There is no change in the income tax rate for the year 2014-15 (Assessment Year 2015-16)

(i) The rates of income-tax in the case of every individual (other than those mentioned in (ii) and (iii) below)

Upto Rs. 2,50,000
Rs. 2,50,001 to Rs. 5,00,000	10 per cent.
Rs. 5,00,001 to Rs. 10,00,000	20 per cent.
Above Rs. 10,00,000	30 per cent.

(ii)               For persons of Age between 60 Years to 80 Years

Upto Rs. 3,00,000
Rs. 3,00,001 to Rs. 5,00,000	10 per cent.
Rs. 5,00,001 to Rs. 10,00,000	20 per cent.
Above Rs. 10,00,000	30 per cent.

(iii)             For persons having Age of 80 Years or More

Upto Rs. 5,00,000
Rs. 5,00,001 to Rs. 10,00,000	20 per cent.
Above Rs. 10,00,000	30 per cent.

Other Budget 2014 highlights relating to Income tax 2014-15

·         Personal tax exemption limit raised to Rs 2.5 lakh from current Rs 2 lakh for taxpayers below 60 years

·         Senior citizens’ tax exemption limit hiked from Rs 2.5 lakh to Rs 3 lakh No change in surcharge for corporates, individuals

·         Education Cess to stay at current 3%

·         Investment limit under Section 80C hiked to Rs 1.5 lakh from current Rs 1 lakh

·         Exemption on housing loans interest on self-occupied property increased from Rs 1.5 lakh to 2 lakh

Source: AIRF

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