Tax Savings and Benefits in Budget 2015-16

The FM has extended tax concessions mostly for senior citizens in this Budget without doing any changes in Income Tax Slabs and there are no changes in Section 80C limits for the salaried. The FM also went all out to fight against black money announcing a string of stringent tax measures for concealment of foreign income or non-disclosure of foreign assets in Income Tax Returns.

For Senior Citizens

Section 80D limit raised to Rs 30,000 – Deductions under section 80D are allowed on health insurance premium paid. In case of premium paid for senior citizens the deduction allowed shall be up to Rs 30,000. This is a great relief to Senior Citizens who may have to shell out a higher premium. This limit was Rs 20,000 earlier.

Under Section 80DDB – Deduction towards medical treatment for senior citizens suffering from specified diseases raised from Rs 60,000 to Rs 80,000. If actual expenses incurred for treatment are lower, such lower amount shall be allowed as a deduction. This saving plans are beneficial for senior citizens.

Deduction for Medical Expenses for Super Senior Citizens up to Rs 30,000: Individuals who are more than 80 years old shall be allowed a deduction for medical expenses of up to Rs 30,000 from their total income.

Service Tax Exemption on premium paid by Senior Citizens for Varishtha Bima Yojana – Senior citizens shall not be required to pay for service tax component on insurance premium of this bima.

Want to know how much tax you will pay in FY 2015-16? Download our app to calculate your tax.

For those less than 60 years old

Increased deduction under section 80D to Rs 25,000 from Rs 15,000 – when you pay health insurance premium for self or spouse or children (allowed for dependent children) you can now claim a deduction of Rs 25,000 instead of Rs 15,000 allowed earlier. This increase is a great encouragement to tax payers to insure their health if they haven’t already.

Higher Income Tax Deductions for the differently abled – In order to provide tax benefit to those who are differently abled or those caring for dependents who may be differently abled, the FM increased the deduction – Under Section 80DD and Under Section 80U – where disability is 40% or more but less than 80% the fixed deduction. The deduction earlier allowed was Rs 50,000 which is now raised to Rs 75,000. And in case of more than 80% disability deduction allowed was Rs 1,00,000 which is now raised to Rs 1,25,000.

Transport Allowance now Rs 1600 pm up from Rs 800 pm – Total exemption that will be allowed on transport allowance is now Rs 19,200 annually instead of Rs 9,600 earlier. This limit has been revised after several years and will be a welcome relief for low income earners.

Tax free Infrastructure Bonds – The FM announced that tax free infrastructure bonds shall be announced to support the government’s plan for investing more money into roads and railways.

100% deduction under Section 80G for contributions to Swaach Bharat Abhiyaan and Clean Ganga Fund

Interest earned on Sukanya Samridhi Account to be fully tax free – Under this scheme a minimum amount of Rs 1,000 has to be deposited each year for the girl child account. A maximum Rs 1,50,000 can be invested in each financial year. The amount deposited in this account shall be eligible for deduction under section 80C. The FM announced that interest payments shall be fully exempt from tax.

Additional deduction of Rs 50,000 towards contributions to Pension Funds – The FM emphasized the government is committed to ensuring pension for the common man and towards this effort they enhanced the deduction under section 80CCD by Rs 50,000 for contribution to pension funds.

How much tax will you actually save on your income? Download our app to calculate the tax you will pay in financial year 2015-16. You can also check the status of your income tax refund status here.

[Source: http://blog.cleartax.in/tax-savings-and-benefits-in-budget-2015-16/]