UNION BUDGET 2016

budget16

The Finance Minister of India presented union budget 2016, which may have effects either ways on investors or on the personal finance world as a whole. How good or bad analyze yourself with respect to your own,through the glimpses below:

 

  1. Income tax slabs unchanged : There is no change in income tax slab for year 2016-2017.But for individuals whose income is not exceeding Rs. 5 lakh, ceiling of income tax rebate will be Rs.5000 instead of Rs.2000.So those tax payers will get relief of Rs.3000 in their tax liability.
  2. PPF withdrawal to remain tax free:PPF remains the famous financial instrument will enjoy EEE status i.e. interest earned and withdrawals will be tax free.
  3. EPF withdrawal partially taxable: Now,, 40% of the accumulated balance in EPF will be exempt from tax. The remaining 60% will be taxed, making provident fund partially EET -Exempt-Exempt-Taxable from EEE.
  4. Tax free 40% withdrawal from NPS : 40% corpus that can be withdrawn at retirement from NPS -National Pension Scheme will now be exempt from tax…Earlier withdrawal from NPS was completely taxable
  5. No capital gains for Gold bonds:If you retain Gold bonds till maturity & if there is capital gains then it will be tax free. Also if they are sold in secondary market then indexation benefit will be available. But interest earned from gold bonds will be taxable.
  6. Gold monetization scheme: Interest earned will be exempt from tax for certificates issued under Gold monetization scheme.
  7. 10% tax on more than 10 Lakh dividend :If dividend earned from stocks is more than 10 lakh then dividend earned above Rs.10 lakh will be taxed at 10%.It will not include dividend earned from mutual funds.
  8. Additional exemption for first home buyer: Additional exemption of Rs.50000/- for housing loan up to Rs.35 lakh subject to cost of house is not more than Rs.50 lakh. This exemption is applicable for first home buyers.
  9. Additional Deduction for those living in rented houses: Under section 80GG, Deduction for rent paid will be raised from Rs.24000 to Rs.60,000 per annum.
  10. Proposed Reduction in service tax for single premium annuity plans:For Single premium annuity plans it is proposed to reduce service tax from 3.5% to 1.4%.