No change in tax slabs but some sops for middle class
NEW DELHI: Finance Minister Arun Jaitley disappointed the middle class by belying expectations that he would hike the exemption limit from the existing Rs. 2.50 lakhs per annum.
These expectations were based on the belief that the BJP-led NDA Government would seek to repay to the middle-class by way of tax sops for voting for it in the 2014 general elections. Mr. Jaitley resisted this temptation but extended a number of benefits to the middle-class tax payers which he described as the fifth pillar of his taxation proposals. They are:
- Increase in the limit of deduction in respect of health insurance premium from `15,000 to `25,000.
- For senior citizens the limit will stand increased to `30,000 from the existing `20,000.
- For very senior citizens of the age of 80 years or more, who are not covered by health insurance, deduction of ` 30,000 towards expenditure incurred on their treatment will be allowed.
- The deduction limit of ` 60,000 towards expenditure on account of specified diseases of serious nature is proposed to be enhanced to `80,000 in case of very senior citizens.
- Additional deduction of ` 25,000 will be allowed for differently abled persons under Section 80DD and Section 80U of the Income-tax Act.
- The limit on deduction on account of contribution to a Pension Fund and the New Pension Scheme is proposed to be increased from`1 lakh to `1.5 lakh.
- To provide social safety net and the facility of pension to individuals, an additional deduction of ` 50,000 is proposed to be provided for contribution to the New Pension Scheme under Section 80CCD. This will enable India to become a pensioned society instead of a pensionless society.
- Investments in Sukanya Samriddhi Scheme are already eligible for deduction under Section 80C. All payments to the beneficiaries including interest payment on deposit will also be fully exempt.
- Transport allowance exemption is being increased from Rs. 800 to Rs. 1,600 per month.
- For the benefit of senior citizens, service tax exemption will be provided on Varishta Bima Yojana.