First Time Home Buyers to get additional deduction of rs 50000 on interest for loan upto rs 35 lakh
Arun Jaitley, the finance minister during the budget speech of 2016-2017 today mentioned that he has planned lots of things for the non salaried employees, farmers and the middle class. The most important announcement for the middle class people is that one can get rebate on the purchase of house i.e. Rs. 50,000 rebate if the cost of the home is below 50 lakh rupees, loan less then 35 lakhs and if this your first home.
The particulars are given in the table below picked from his budget speech (please refer to the table below).
Tax Deduction details referred to para 99
|1.||Deduction under sec 80C||1,50,000|
|2.||Deduction under sec 80 CCD||50,000|
|3.||Deduction on account of interest on house property loan (Self Occupied Property)||2,00,000|
|4.||Deduction under sec 80D on health insurance premium||25,000|
|5.||Exemption of transport allowance||19,200|
Declaration Of The Finance Minister
Finance minister’s declaration is erroneous at numerous levels. For the most part he needs us to think that he was accountable for all the exemptions. Secondly, what the finance minister is talking are fundamentally tax deductions furthermore not benefits of tax. What our Finance Minister should have told is that the whole deductions of tax will sum up to about 4.44 lakh rupees. And the benefit of tax would rest on the taxation bracket one comes under. Consequently, any person in the 10.3 percent taxation bracket will save tax amount of about 45,752.6 rupees. Any person in the 20.6 percent tax bracket will save tax sum of about 91,505.2 rupees. And any person in the 30.9 person tax bracket will save tax amount of about 1,37,257.8 rupees.
Our Finance minister in his two budgets had only re-jigged the whole sum of deductions that goes under the different sections of IT Act. This financial year, he enhanced the deduction on the premium of health insurance from 15, 000 rupees to 25,000 rupees. He as well permitted an additional deduction’ of 50,000 rupees for the investments which made on the NPS. The allowance on transport permitted as exclusion has been made twice from 9,600 rupees to 19,200 rupees.
When all are taken into thought Jaitley has permitted an additional tax deduction of 1,69,600 rupees in his two budgets.( 50,000 rupees extra for Sec 80C plus 50,000 rupees additional to invest in NPS plus 50,000 rupees extra for the interest compensated on any home loan plus 10,000 rupees extra on the premium of health insurance plus 9,600 rupees extra on the transport allowance).
Any additional advantage is on the 1,69,600 rupees. For those people who are in the 10.3 percent tax bracket it will work out to 17,407 rupees. For those people in the 20.6 percent tax bracket it will work out to 34,814 rupees. For those individuals in the 30.9 percent tax bracket it will work out to 52,221 rupees.
This year’s budget had brought much for the people who are involved in farming. Government had made lots of plans for agricultural field and the aim of the government to raise the condition of the farmers and make them get the appropriate rate of their products.