Finance Minister Arun Jaitley had announced incremental tax benefits for common taxpayers in his recent Budget 2016
Here are some income tax changes that experts expect in the budget:
1) The basic income tax exemption limit should be raised from Rs. 2.5 lakh for male & female below 60 years age.
2) The current deduction limit of Rs. 2 lakh on home loan interest paid U/s 24B during a financial year is too & Additional Section 80EE where can get more Home Loan Interest Max Rs. 1.5 Lakh excluding U/s 24B.
3) A separate section for deduction on the principal paid on home loan should be introduced. Home loan principal repayment deduction is currently clubbed with other options under Section 80C, which has a ceiling of Rs. 1.50 lakh.
4) Home buyers can currently avail home loan interest deduction only after the completion of construction of property. In case construction is not complete within 3 years, the deduction is reduced to Rs. 30,000 per year from Rs. 2 lakh under current norms. This needs to be changed, given widespread construction delays.
5) The limit of Section 80C of Rs. 1.5 lakh which raised and linked to the Additional exemption U/s 80CCD(1B) Max. Rs. 50,000/- income-level of tax payers as some of the compulsory contributions like employee provident fund leave very little scope for other investments for people falling in highest tax bracket up to Rs. 2 Lakh.
6) Medical Insurance U/s 80D has raised the Max. limit of Rs. 25,000 per annum & Rs. 30,000/- for Sr.Citizen
7) The travel allowance, which is raised to Rs. 1,600 per month from Rs. 800 & Rs. 3200/- P.M. for above 80% Phy.disable persons.
8) The New Pension Scheme (NPS) should be made tax-exempt on withdrawal on the lines of other investments like PPF, insurance policies etc.