INCOME TAX RULES APPLICABLE FOR FY 2016-17AS PER BUDGET 2016:-
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1. No change in income tax slab for FY 2016-17. Basic exemption limit is same Rs.2,50,000 for non-senior citizen and Rs.3,00,000 for senior citizen.
2. There is no change in income tax rate for fy 2016-17.
3. Additional deduction of Rs.3000 is available u/s 87A. Now, Section 87A will provide Rs.5000.
4. The rate of surcharge is increased from 12% to 15% for income more than Rs. 1 crore.
5. Additional Rs.50000 income tax deduction for interest on housing loan is available for the first-time buyer of the house. The loan should not be more Rs.35 lakhs and cost of the house should not be more than Rs.50 Lakhs.
6. Section 80GG deduction is increased from Rs. 24,000 to Rs.60,000.
7. Withdrawal from national pension scheme at the time of retirement is exempt subject to 40% of withdrawal.
8. Similarly, 40% withdrawal from supper annotation fund is also exempt.
9. Any payment received from sukanya samriddhi scheme is exempt.
10. For deduction under section 80DDB, the limit is increased from Rs. 60,000 to Rs.80,000.
11. Deduction limit for Section 80D is increased by Rs.10,000 for nonsenior citizen and senior citizen. For the nonsenior citizen, the limit is Rs. 25,000 and for the senior citizen, the limit is Rs. 30,000.
12. Deduction limit for section 80DD has been increased from Rs. 50,000 to Rs.75,000. For severe disability, the limit is increased from Rs. 1 Lakhs to Rs.1.25 Lakhs.
13. For contribution to NPS ( National Pension Scheme) under section 80CCD, the limit is increased from Rs. 1.5 Lakhs. Additional deduction up to Rs. 50,000 is allowed for contribution above Rs. 1.5 Lakhs in the national pension scheme.
14. Dividend income will be taxed at 10%- applicable to individual and HUF receiving dividend income more than Rs. 10 Lakhs.
15. If the assessee has made the investment in certain categories, the capital gain will not be taxed.
16. Transport allowance exemption limit has been increased from Rs. 800 to Rs.1,600 p.m. for salary income.
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