Download All in One TDS on Salary for Govt and Non Govt Employees for F.Y.2015-16 [This Excel Utility can prepare at a time Tax Calculation Sheet + Salary Structure + Automatic HRA Exemption Calculation + Form 16 Part A&B and Part B for A.Y.2016-17 ]
1. No Hike in basic exemption Tax limit
The first disappointment comes in the form of no increase in the basic exemption limit. This means the tax slab will remain same for the financial year 2015-16 i.e. assessment year 2106-17 but the surcharge rate of 10% is increased to 12% for the tax payers having income above Rs.1 crore. This increment in the surcharge rate is made to compensate the income from the abolished wealth tax.
2. Section 80C ceiling limit remains Rs.1.50 lakhs per annum
With the inclusion of Sukanya Samriddhi Account Max limit Rs.1.5 Lakh and , there was an inevitable need of expanding the threshold limit of section 80C but that did not happen. Section 80C remains intact in budget 2015.
3. Rise in the Health Insurance Premium paid u/s 80D
To spread the health care awareness among individual tax payers, section 80D has been amended by increasing the deduction limit for the premium paid for health insurance to Rs.25,000 for non-senior individuals (earlier Rs.15,000) and Rs.30,000 for senior citizens (earlier Rs.20,000). For super senior citizens (80 years or more) who are not eligible for health insurance get some relief in terms of deduction towards their medical expenses up to Rs.30,000 per year.
4. Additional Tax-Savings under Section 80DD, Section 80DDB and Section 80U
In view of the steep rise in the cost of the medical care, Government has increased deduction limit under section 80U and section 80DD by Rs.25,000 i.e. medical expense of disabled individual and dependent on Individual, from existing Rs.50,000 to Rs.75,000 and in case of severe disability the addition amounts to Rs.50,000 i.e. from existing Rs.1,00,000 to Rs.1,50,000.
Further, Government has also given additional tax sop of Rs.20,000 (from Rs.60,000 to Rs.80,000) on the medical treatment of some specific diseases such as cancer, AIDS etc. for very senior citizens (aged 80 years or more) under section 80DDB.
5. Transport Allowance Doubled
The transport allowance cost has witnessed some sharp increase and to cope up with that Government has doubled the transport allowance from existing Rs.800 per month to Rs.1,600 per month which totaled to Rs.19,200 per year.
6. Home Loan Interest Deductions remains Intact
The limit of home loan interest deduction u/s 24 was hiked in the interim budget last year to Rs.2 lakhs. But with the rising cost of property, there was a need of increasing this deduction limit to Rs.3 lakhs which was not met. So the ceiling limit of home loan interest for the self-occupied property remains intact at Rs.2 lakhs per year under section 24(b).
7. National Pension Scheme u/s 80CCD increased by Rs.50,000
Investments towards National Pension Scheme has got some additional tax sops of Rs.50,000 over and above the Section 80C ceiling limit of Rs.1.50 lakhs.
Deduction limit of investment towards pension plans, annuity plans and new pension scheme is hiked to Rs.1.50 lakhs from earlier threshold limit of Rs.1 lakhs. In the previous budget, the limit of section 80C was hiked but the deduction limit for pension plans capped to Rs.1 lakh only; now, budget 2015 has removed that anomaly.
Summary of all Deductions
8. Service tax rate increased to 14%
A major hit to the common men comes in the guise of service tax. Budget 2015-16 has hiked the service tax rate from existing 12.36 to 14%. This means now every service such as eating food outside, paying your mobile or gymnasium bills etc. would attract extra tax.