Budget 2016 has been announced and the entire India is currently trying to figure out the benefitting factors from the Budget 2016. Here is the analysis report from The Asian Herald that will help you understand the Budget much better. Finance Minister Mr. Arun Jaitley did not change the Tax Slabs for the Payers. However, there have many other changes that can benefit you. Here are the details that you need to know from Budget 2016.
Tax Rebate in 87A – Budget 2016
Additional Tax Rebate of INR 300 has been increased under 87A Section. However, this is only applicable for those people who are earning less than INR 5 Lakhs per year. So, eventually, the Tax Rebate under 87 A has been increased to 5000 and that makes your exemption limit 3 Lakhs.
Home Loans Rebate
For the first time Home Loans buyers, benefits have been hidden. One can enjoy extra INR 50000 rebate for the Home Loans provided the loan amount is under INR 35 Lakhs and the purchase amount is under 50 Lakhs.
Pension Schemes Rebates
This has been a key area for the rebates in Budget 2016. FM indicated that withdrawal from the NPS Corpus up to 40% will be tax exempted at the time of retirement. As far as the Superannuation Funds, all kind of Provident Funds are concerned; these will also enjoy the tax exempt for the corpus created. However, it will eligible for the contributions made after April 1, 2016. FM has also announced that the Annuity Fund that gets transferred to the legal heir after the death of the pensioner will not be taxable. The Single Premium Annuity saw huge reduction to 1.4% from 3.5% as well.
Small Business, Freelancers and Professionals Rebate
For all the Small and Medium Entrepreneurs, good news is that , the presumptive taxation scheme has been revised from 1 Crore to 2 Crores INR. So, if you have a business and your turnover is less than 2 Crores than you need to pay 8% of Tax as the assumption. Also, there will be no need of bookkeeping, profit and loss statements and Audits. The Actual income will not be considered under the Section 44D. The Section has also been provided to the professionals who need to pay 50% of tax of gross receipts up to INR 50 Lakhs. They also need to fill the ITR 4S Form from now on.
Good news for NRIs as they need not to pay higher TDS of 20% if they do not have PAN Card provided they have the TIN.
Tax Declaration Window
The window will open from June 1 to September 30 and taxpayers can pay 30% of the undisclosed amount within two months. Surcharge amount of 7.5% along with another 7.5% of penalty will be levied from them for the undisclosed amount. It will also immune them from the legal prosecution under Income Tax Act or Benami Transaction (Prohibition) Act, 1988. The extra 7.5% will be used for Agriculture and rural economy.
The penalties for the Tax Evaders should be huge. The penalty amount will be 50% for underreported amount and 200% for misquoted fact. The income tax officer of can levy 100% and 300% of tax sought to be evaded.
Car, Clothes and Cigarettes
Luxury Cars will cost more as the tax at the rate of 1% will be imposed on exceeding amount of INR 10 Lakh. The same will be implemented for Goods and Services bought in Cash INR 2 Lakh. 1% increase on small petrol, LPG and CNG Cars and 2.5% on diesel cars will be imposed along with 4% on higher engines vehicle like SUV. The cost on Clothes for more than INR 1000 and cigarettes will cost more.