Rs 5 thousand Income tax rebate for people earning less then rs 5 Lakhs :Section 87A
In the union budget of 2016, Arun Jaithley, the Finance Minister of India has enhanced the rebate on tax given to the people with total income less or equal to 5 lakh rupees u/s 87A from 2000 rupees to 5000 rupees. At present, under this segment any individual with total income of 5 lakh rupees can enjoy a tax rebate equal to 100% of income tax billed or 2000 rupees whichever is lesser.
Arun Jaithley, the Finance Minister as well declared an extra relief on tax of 50,000 rupees per year on any loan of 35 lakh rupees in the financial year2016-17 for first-time buyers of home, on the condition that the cost of the house does not go beyond 50 lakh rupees.
Extra Relief for Small Tax Payers
According to Jaithley, people with the income 5 lakh rupees will acquire a respite of 3,000 rupees in their liability of tax. The central government has as well proposed to enhance the income limitation under presumptive scheme of tax under section 44 AD of IT Act to 2 crore rupees from the existing limitation of 1 crore rupees, which will profit over 30 lacs small business owners.
He as well proposed to expand the presumptive scheme of tax with the profit estimated to be fifty percent to professionals along with gross revenue up to 50 lakh rupees. Arun Jaithley as well declared to boost security transaction taxation in the case of ‘Alternatives from 0.017% to 0.05 %.
Stressing on generalization and rationalization of tax, the FM stated that thirteen cesses, taxed by the different Ministries wherein collection of revenue is lesser than 50 crore rupees, will be eliminated. For the nonresident individuals, providing optional documents of PAN-Card would be permitted and provisions of TDS for the Income Tax would be rationalized, he further stated. A revision facility of the return will as well be expanded to the CEAs, he included.
The Finance Minister declared three fresh measures to give break to the small taxpayers today in the Budget of 2016.
|A.||Mr Arun Jaitley lifted the limit of deduction u/s 87 A of the IT Act from 2,000 rupees to 5,000 rupees per year. U/S 87 A, taxpayers will first cut 2,000 rupees from their whole payable tax. This part is applicable to people with the overall income lesser than 5 lac rupees. The Finance minister stated that the move would assist over two crore taxpayers.
|B.||Mr. Arun Jaithley as well declared relief for the taxpayers who don’t have their own house and do not get HRA from their employers. Up to now, these taxpayers acquired a respite of 24,000 rupee per annum that has at the present been lifted to 60,000 rupees per year u/s 80 GG. The measure would give “respite to those people who live in rented properties,” Jaithley further added.|
|C.||The Finance Minister as well declared an extra deduction of 50,000 rupees on interest compensated by the first-time buyers of home on loans up to 35 lakh rupees, on the condition that the house cost does not surpass 50 lakh rupees.|
However, the super-rich people (those people having a total income of above 1 crore rupees) have to compensate more levies as surcharge have been lifted from 12% to 15%.