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Know the Union Budget 2015-2016



Taxation

  • There is no change in the rate of personal income tax for income earned in the financial year 2015-16 and assessment year 2016-17. No change in tax slabs.
  • Education cess at 2% and secondary and higher education cess at 1% will remain same.

No wealth tax?

Wealth tax has been abolished and replaced with a super-rich tax for those with income of over INR 1 Crore. There is a 2 % additional surcharge on super-rich tax. The finance minister increased the tax surcharge to 12% on individuals earning INR 1 Crore and above annually.

Health Insurance

Section 80 D

  • There is an increase in limit of deduction of health insurance premium from INR 15,000 to INR 25,000 a year for male/female below 60 years of age.
  • If you are a senior citizen between 60-80 years of age the limit of deduction of health insurance premium will be INR 30,000 a year increased from INR 20,000 a year.
  • The finance minister announced an INR 30,000 deduction for medical treatment of super senior citizens (above 80 years) who are not covered under any health plan. Senior citizens can now claim deductions for actual expenses without being dependent on a health insurer.
    Transport allowance exemption increased?
    Transport allowance exemption has been increased to INR 1,600 a month from INR 800 a month. In addition to the basic tax exemption you can claim tax benefits up to INR 4,44, 200.
How to get there Per Year
Deductions under Section 80 C INR 1, 50, 000
Deductions under 80CCD for contribution to NPS INR 50,000
Interest for self occupied property INR 2, 00 , 000
Transport allowance (INR 1600 a month) INR 19,200
Deductions under Section 80 D INR 25,000
Total INR 4, 44 ,200

Section 80 DD and Section 80 U

An additional deduction of INR 25,000 will be allowed for differently abled persons under Section 80 DD and Section 80 U of the income tax act.

  • It is proposed to increase the limit of deduction from INR 1 Lakh to INR 1.25 Lakhs in case of severe disability (80% or more of one or more disability) under Section 80 DD and Section 80 U.
  • It is proposed that the deduction limit of INR 60,000 on the expenditure incurred for specified diseases of serious nature be increased to INR 80,000 for very senior citizens under Section 80 DDB.

Sukanya Samriddhi Scheme

Investments in Sukanya Samriddhi Scheme are eligible for deduction under Section 80C. All payments to the nominees or beneficiaries including interest payment on deposit will also be fully exempt from tax. It offers you a rate of interest of 9.1% compounded yearly.

Good news if your Company gives you an EPF

Employee may opt either for an EPF or new pension scheme (NPS). Employee’s contribution to the EPF below an income threshold will be optional without reducing employer's contribution.

Severe penalty for tax evasion

  • If you conceal your income you will be punishable by 10 years of rigorous imprisonment and 300% penalty. Non-filing of returns, or filing of returns with inadequate information will attract rigorous imprisonment.
  • No cash transactions exceeding INR 20,000 for the purchase of immovable properties are allowed.

Insurance

Low premium insurance schemes to widen insurance penetration in India.

Pradhan Mantri Jeevan Jyoti Bima Yojana

  • Both natural and accidental deaths are covered under Pradhan Mantri Jeevan Jyoti Bima Yojana.
  • You have to be in the age group of 18-50 years to be eligible for the scheme.
  • The premium will be as low as INR 330 per year which is less than INR 1 per day.
  • The life cover will be INR 2 lakhs.

PM Surakhsha Bhima Yojana

PMSBY launched to increase the access of public to insurance. It will be linked with PM Jan Dhan Yojana scheme.

  • Available to people in age group 18 to 70 years with bank account.
  • Premium of INR 12 per year.
  • For accidental death and full disability you get INR 2 Lakh and for partial disability you get INR 1 Lakh.
  • The premium will be automatically debited by the bank from the subscribers account. There is no other mode to make payments.
  • Any person having a bank account and Aadhaar number linked to the bank account must fill up a simple form with the bank every year before 1st of June in order to join the scheme. You have to fill the name of the nominee.
  • The scheme is offered by all Public Sector General Insurance Companies and insurers who are willing to join the scheme. The insurers need to have a tie up with banks.
Financial Planning
Tax Planning
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