Yesterday, Mr. Arun Jaitley presented the budget for 2016-2017. There are no major changes for individuals. Yes, definitely this is a disappointing budget. Instead of thinking what is not there, let us check what we have in it. Let me do quick deep dive and provide how you can make most from budget announced yesterday. What are the benefits from Union Budget 2016-2017 for an employee or a common man?
8 Benefits Union Budget 2016-2017 brought for you
1) 40% of NPS withdrawals are tax free
Individuals who contribute to the National Pension System (NPS) scheme will be happy to know that withdrawal up to 40% of the corpus at the time of retirement will be tax exempt. At the time of retirement, NPS subscriber can withdraw 60% of the corpus and invest the remaining 40% in an annuity. Earlier, the entire corpus, which can be withdrawn (60%) was subject to tax. You can read complete guide about Benefits from New Pension Scheme (NPS).
2) First time home buyer would get ₹ 50,000 additional tax benefit
If you are buying your home first time, then you can get additional exemption of 50,000 on your home loan interest. The only condition is that the home loan should not exceed ₹ 35 Lakhs and total property value should not exceed ₹ 50 Lakhs. This would be over and above current limit of ₹ 2 Lakhs where one can claim as exemption from home loan interest. If you are looking for best home loan you should consider these tips.
3) Individuals earning < ₹ 5 Lakhs would get ₹ 5,000 rebate
If you are earning less than ₹ 5 Lakhs income, you would get ₹ 5,000 rebate on your income tax. Earlier this limit was only ₹ 2,000.
4) HRA / Rent paid increased to ₹ 60,000
In order to provide some relief to individuals who are in rented house, govt. of India has increased HRA / Rent paid limit from ₹ 24,000 to ₹ 60,000 per annum (section 80GG).
5) Interest on Gold monetization scheme is exempted from tax
Interest on Deposit Certificates issued under the Gold Monetisation Scheme, shall be exempt from income-tax. You can plan to invest in gold monetization schemes where I indicated it as a win-win situation.
6) EPF of 8.33% for first 3 years of your employment
If you have just started your career, govt. of India would provide 8.33% in your EPF account for the first 3 years of your employment.
7) Single Premium Insurance – Reduction of service tax from 3.5% to 1.4%
If you are planning to invest in single premium (annuity) insurance policies, you need to pay only 1.4% of service tax as against earlier 3.5% rate. You can check top single premium policies to invest and gain 1.9% of service tax now.
8) Free health insurance upto ₹ 1 Lakh per family
Government of India to provide health insurance of upto ₹. 1 lakh per family. Also there would be top up of ₹. 35,000 for people above 60 years.
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Suresh
Benefits Union Budget 2016-2017 brought for you
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