Tax Relief & Tax Burden on Salaried Employee From Budget-2016 For Asstt. Year 2017-18

SMALL TAX RELIEF TO HUGE SMALL TAX PAYERS

Raise the ceiling of tax rebate under section 87A from Rs. 2000 to Rs. 5000 to lessen tax burden on individuals with income upto Rs. 5 laks.

Increase the limit of deduction of rent paid under section 80GG from Rs. 24000 per annum to Rs. 60000, to provide relief to those who live in rented houses.

BIG LOSS TO PENSIONER’S 


Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS). Annuity fund which goes to legal heir will not be taxable.
In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 1.4.2016.
Limit for contribution of employer in recognized Provident and Superannuation Fund of Rs. 1.5 lakh per annum for taking tax benefit. Exemption from service tax for Annuity services provided by NPS and Services provided by EPFO to employees.
Reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.

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