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Budget raises tax deduction limit to Rs4.44 lakh for I-T payer

Budget raises tax deduction limit to Rs4.44 lakh for I-T payer
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In the Budget for 2015-16, Indian Finance Minister Arun Jaitley has proposed raising the tax deduction limit by Rs 10,000 for payment towards health insurance premium.

At the same time, exemption of transport allowance has been doubled to Rs 19,200 per year.

So, the deduction limit has been raised by Rs 19,200 per year as the Finance Minister has proposed raising tax deduction limit on few counts.

"...the fifth pillar of my taxation proposals this year is extension of benefits to middle class tax payers," he said in his Budget speech.

To provide social safety net and the facility of pension to individuals, an additional deduction of Rs 50,000 is proposed to be provided for contribution to the New Pension Scheme under Section 80CCD, he said.

"This will enable India to become a pensioned society instead of a pensionless society," he said.

Transport allowance exemption is being increased from Rs 800 to Rs 1,600 per month, he added.

Besides, the other deduction has been maintained namely -- deduction under section 80C of Rs 1.5 lakh while deduction under section 80CCD Rs 50,000.

At the same time tax deduction on account of interest on house property loan self occupied property has been unchanged at Rs 2 lakh.

"Having raised the basic exemption limit and 80C limit etc last year, there was hardly any scope for further concession. Raising the limit of health insurance premium, transport allowance exemption and additional deduction of 50,000 for NPS will help taxpayers to save little more in taxes," PwC India Partner and Leader Personal Tax Kuldip Kumar said.

Commenting on tax deduction limit, PNB MetLife MD Tarun Chugh said the proposal to increase the tax benefits for health insurance from Rs 15,000 to Rs 25,000 is a welcome step.

"Currently, over 78-80 per cent of health care expenses are funded by the Indians out of their own pocket and this move will encourage people to increase their coverage keeping in the mind the rising cost of healthcare," he said.

With the reduction of corporate tax rate in a phased manner from 30 per cent to 25 per cent over the next 4 years, India Inc has a tax clarity for next five years at-least, Rakesh Nagia, Managing Partner Nagia & Company.

Additionally, he said, with a view to tax the super-rich in an efficient manner, FM has duly taxed the super rich by abolishing wealth tax and levying 2 per cent surcharge.

Govt raises farm credit target to Rs 8.5 lakh cr for 2015-16
The government today raised the farm credit target by Rs 50,000 crore to Rs 8.5 lakh crore, allocated Rs 5,300 crore for flagship irrigation programme and announced plans to set up a common agricultural national market to boost farmers' income that is "under stress".

The government has clubbed 10 major schemes, including National Food Security Mission, under the umbrella scheme "Krishionnati Yojana" to be implemented by states with central assistance of Rs 9,000 crore during the 2015-16 fiscal.

Another Rs 5,300 crore has been allocated to the Pradhan Mantri Gram Sinchai Yojana (PMGSY) to boost irrigation as currently more than 60 per cent of farm land is rainfed.

Presenting his maiden full-fledged Budget for 2015-16, Finance Minister Arun Jaitley said, "Farm credit underpins the efforts of our hard- working farmers. I have, therefore, set up an ambitious target of Rs 8.5 lakh crore of credit during the year 2015-16 which, I am sure, the banks will surpass."

Farmers have been availing crop loans up to Rs 3 lakh at 7 per cent interest rate. However, the effective rate of interest for farmers who repay on time is 4 per cent.

Noting that farm incomes are under stress, Jaitely listed out raising farmers' income as one of the major challenges ahead for the government.

"While the farmer is no longer in the clutches of local trader, his produce still does not command the best national price. To increase the incomes of farmers, it is imperative that we create a National agricultural market, which will have incidental benefit of moderating price rises. I intend this year to work with States, in NITI, for the creation of a Unified National Agriculture Market," he said.

Emphasising that raising productivity and realisation of reasonable price for agri-produce is essential for the welfare of rural people, Jaitley said, "We should commit to increase irrigation area, improve efficiency of distinct irrigation scheme, promoting agro-based industries for value addition, increasing farm income and reasonable prices for farmers produce."

To support agriculture sector with the help of effective and hassle-free agricultural credit with special focus on small and marginal farmers, the Finance Minister allocated Rs 25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund set up under NABARD.
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