Budget 2016 highlights for individual tax-payers

The salaried class in India had a lot of expectation from the budget 2016 in respect of IT exemption limit. But no changes have been made to existing tax slabs. However, a small relief is provided by increasing maximum tax relief from Rs.2000/- to maximum Rs.5000/-under section 87(a) to individuals whose income is less than Rs.500000/- .The highlights of the budget announcement for individuals are as under.

1. No changes have been made to existing income tax slabs.
2. Relief u/s 87(a) is increased from Rs.2000/- to maximum of Rs.5000/- to individuals whose income is less than Rs.500000/-
3. Individuals who donot get HRA from the employers were eligible for maximum deduction of Rs.24000/- per annum on rent (Rs.2000/- rent per month) paid by them u/s.80GG. This limit is increased to Rs.60000/- for the FY 2016-17.
4. 40% of withdrawal under New Pension Scheme (NPS) to be tax exempt.
5. Additional exemption of Rs.50000/- interest paid by first time house buyers on housing loan up to Rs.35 lacs (Value of the property should be below Rs.50 lacs).
6. No service tax for house built below 60 square meters.
7. Government contributes 8.33% for 3 years to EPF/NPS to all new employees who draw salary up to Rs.15000/-
8. Surcharge on income of super rich who earn above rupees one crore is increased to 15% from 12%.
9. Dividend Distribution Tax (DDT) levied on those who earn above Rs.10 lacs.