Income tax provisions in the Budget 2016.

Income tax provisions proposed by Finance Minister Arun Jaitley in the Budget 2016.

1. Deduction limit under Section 87A of the Income Tax Act raised from Rs.2,000 to Rs.5,000 per annum. This applies to those with total income of less than Rs.5 lakh. According to Finance Minister this move will help more than 2 crore taxpayers.

2. The finance minister also raised the relief under Section 80GG for individuals paying rent but not receiving house rent allowance from employers from existing Rs. 24,000 to Rs. 60,000.

3. First-time home buyers to get additional deduction of Rs 50,000 on interest for loan upto Rs 35 lakh, provided the cost of the house doesn't exceed Rs.50 lakh.

4. Those with an income of over Rs.1 crore will have to pay more taxes as surcharge has been raised from 12% to 15%.

5. No change in Income Tax slab (Currently, a resident individual below 60 years of age, income up to Rs 2,50,000 is exempt from tax, income from Rs 250,001 to Rs 5,00,000 is taxed at 10%, from Rs 5,00,001 to Rs 10,00,000 at 20% and above Rs 10 lakh at 30%.)

You may also like to read: 7 Financial decisions you need to make before you turn 30
You may also like to read: What is Systematic Investment Plan (SIP)?