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Budget highlights Income Tax from Narasimham, CA
Budget Highlights – KL NARASIMHAM, Chartered Accountant, Visakhapatnam
Basic Exemption limit is increased to Rs. 1,00,000
For Women the basic exemption limit is Rs. 1,25,000
For Senior Citizen the exemption limit is Rs. 1,50,000
Income Tax @ 10% for income above 1.00 lakh and below Rs.1.50 lakh
20% for income above 1.50 lakh and below Rs. 2.50 lakh
30% for income above 2.50 lakhs
| Upto Rs. 1 lakh | NIL |
| Rs. 1 lakh to 1.5 lakh | 10% |
| Rs. 1.5 lakhs to Rs. 2.5 lakh | 20% |
| above Rs. 2.5 lakhs | 30% |
| Surcharge of 10% above | 10 lakh |
| For women upto Rs. 1.25 lakh | NIL |
| For Senior Citizens upto Rs. 1.5 Lakh | NIL |
2. No more standard deduction
3. Rebate under Section 88 removed altogether
4. Deduction u/s 80-L (interest on specified securities) is also removed
5. A new exemption limit upto Rs.1,00,000 is introduced. Amounts saved in specified
savings will be allowed as a direct deduction from the income upto Rs. 1.00
lakh (This is replacing the rebate under section 88)
6. Deductions/Rebates for the following will however continue
a. Interest on Self Occupied Housing Loan
b. Premium paid for Mediclaim Insurance
c. Rebates for the Disabled
d. Expenses incurred for specified illness
e. Interest paid on Loans for higher studies
7. Interest on NRE Deposits will attract income tax.
8. Collective expenditure incurred on employees will now be taxed in the hands
of the employer under the name “fringe benefits tax” at 30%, other
than expenditure incurred on transportation and canteen.
9. The general rate of Depreciation on plant and machinery is reduced from 25%
to 15%. However, initial depreciation is allowed at 20%.
10. Corporate Tax has been reduced from 35% to 30% with 10% surcharge.
11. A new levy is introduced by the Finance Minister, which created an uproar
in the Parliament.
Any person who withdraws an amount of Rs.10,000/- or more in a day will attract a tax of 0.10%. This provision is highly regressive and unwarranted. Atleast the Fin Min should have exempted those who do not have a PAN. There are many account holders who do not possess a PAN and yet operate the bank accounts.
There are several cases where a person is required to draw cash from one bank and required to pay tax or other statutory dues like income tax, excise duty, provident fund etc. No exemption seems to be provided in this new harsh provision.