- Personal tax rates (Same as previous year)
|Income (RS.)||Rate of Tax|
|250000 – 500000||10%|
|500000 – 1000000||20%|
|1000000 & above||30%|
- The above exemption limit shall be considered as 3,00,000 in case of senior citizens aged 60 years but less than 80 years and 5,00,000 in case of super senior citizens of the age 80 years or more.
- Surcharge of 10% of income tax if net income exceeds 1 crore subject to Marginal Relief.
- Additional Surcharge of 2% of the income tax on super rich, where the net income exceeds 1 crore. (inserted in Budget 2015)
- EC of 2% and SHE Cess of 1% is leviable on the amount of income tax and surcharge, if any.
- Rebate under Section 87A continues for a resident individual (whose income does not exceed 5,00,000. The amount of rebate is 100% of income tax calculated before education cess or 2,000 whichever is less.
Other amendments :
A. Transport Allowance increased from Rs.800 to Rs.1600 per month
B. Tax benefits under section 80C for the girl child under the Sukanya Samriddhi Account Scheme: (applicable w.e.f. AY 2015-16)
A special small savings instrument for the welfare of girl child has been introduced under the Sukanya Samriddhi Account Rules, 2014.
Tax benefits of this scheme are:
- The investments made in the Scheme will be eligible of deduction under section 80C of the Act.
- The interest accruing on deposits in such account will be exempt from Income tax.
- The withdrawals from the scheme will also be exempt from Income tax.
- The deduction under this scheme is allowed to the parent or legal guardian of the girl child.
C. Increase in quantum of deduction under section 80D:
- Section 80D is amended to raise the limit of deduction from 15000 to 25,000 and for senior citizens from 20,000 to 30,000.
- Further, Instead of Mediclaim Insurance premium the medical expenditure in respect of a very senior citizen upto 30,000 shall also be allowed as deduction under section 80D. This is within the overall limit of 30,000.
D. Increase in limit of deduction under section 80DDB:
- The deduction of Rs 40000 is allowed to an individual being resident in India under section 80DDB for the medical treatment of certain chronic and protracted diseases.
- The assessee shall now be required to obtain a prescription from a specialist doctor for the purpose of availing this deduction.
- Further, it is also proposed to amend section 80DDB to provide for a higher limit of deduction of upto Rs 80,000 for the expenditure incurred in respect of the medical treatment of very senior citizen i.e. assessee over the age of 80 years.
E. Increase in limit of deduction under section 80DD and 80U:
- The limit of deduction under section 80DD & 80U on account of medical treatment of suffering from disability raised from Rs.50,000 to Rs,75,000.
- In respect of a person suffering from severe disability the limit has been raised from Rs.1,00,000 to Rs.1,25,000.
F. Rs.50000 additional deduction under section 80CCD:
- In addition to the existing deduction of 10 % of Salary or Gross Total Income (as the case may be) in respect of contribution made to National Pension Scheme (NPS), an additional deduction of 50,000 is proposed for contributions made by any individual assessee.
- The limit of deduction under section 80CCC from Rs. 1,00,000/- to Rs. 1,50,000/-, within the overall limit provided in section 80CCE.
G. Filling of Form 15G/15H for Non deduction of Tax on payment made under Life Insurance Policy :
Section 197A has been amended to provide that an assessee may file declaration in Form No.15G/15H for non-deduction of tax at source on payments made under Life Insurance Policy in terms of Section 194DA if the total income chargeable to tax is Nil.
H. 100% Deduction u/s 80G on account of contribution to certain funds:
Section 80G is amended so as to provide 100% deduction in respect of donations made to the Swachh Bharat Kosh, the Clean Ganga Fund (applicable w.e.f. AY 2015-16) and Fund for Control of Drug Abuse (w.e.f. AY 2016-17).
I. Amendment in S.192 – TDS on salary:
Section 192 has been amended to provide that DDO/employer, the person responsible for making the payment, shall for the purpose of estimating income of the assessee, obtain from the assessee the evidence proof for claiming deductions/exemptions/set off of losses (i.e. loss from house property) as declared by the assessee.
J. 10% Tax Deduction at Source (TDS)on withdrawal from Employees Provident Fund Scheme (EPFS):
- It is proposed to deduct tax @ 10% on premature withdrawal from the Provident Fund where such payment exceeds Rs.30000. Where employee has not quoted PAN, the deduction of tax will be required to deduct @20% i.e. maximum marginal rate.
- Option to file self-declaration in Form 15G/15H is also applicable.
Disclaimer: Budget 2015 proposals presented by Finance Minister before the Parliament, relevant for salaried assesses, are summarized above. The proposals are subject to amendments as the Finance Bill is yet to be passed by the Parliament. This document is not an offer, invitation or solicitation of any kind and is meant for use of clients and Company/firm’s personnel only. DKM accepts no responsibility for any loss caused by person relying on it.