BENGALURU:  Most awaited Budget is now out!! Finance Minister Arun Jaitley presents the Union Budget 2016-2017 in his one hour forty-two minute speech. “The budget did not make any changes to the tax slabs in this year, but the Finance Minister had a suitcase full of small changes that will make a significant impact to tax outgo in 2016-17,” reports Chandralekha Mukerji for Economic Times Bureau. The budget seems favorable for small tax-payers and investors by showcasing many different schemes and income tax exemptions. The announcement brings individual taxpayers eight important takeaways:

Hike in Tax Rebate: The Union Budget 2013-2014 introduced new section 87A which offered tax rebate of Rs 2000 for the individual whose earnings is below 5 Lakh rupees. Jaitley made tweaks by providing additional rebate of Rs 3000 to the previous budget marking to Rs 5000.

Home Loan Benefits: 2016-2017 seems a good year for home loan seekers as the new budget exempted Rs 50,000 for the first home loan buyers. This benefit is applicable for loan upto Rs 35 lakh where the actual cost of the house is less than Rs 50 lakh. In the budget, the announcement also revealed that Service Tax for houses built in less than sixty square meters is exempted.

Pension Schemes: National Pension Scheme (NPS) sought a positive announcement, offering withdrawal at the time of retirement with a 40% of corpus to be tax free. This scheme will be applicable for those who contribute even after 1st April 2016. The tax will also be exempted for superannuation funds and recognized provident funds, including EPF. “Pension schemes offer financial protection to senior citizens. I believe that the tax treatment should be uniform for defined benefit and defined contribution pension plans,” said Arun Jaitley, Finance Minister in his budget speech. Additionally, Jaitley has also reduced the service tax on Single Premium Annuity or Insurance Policies from 3.5% to 1.4% of the premium paid.

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