The Union Budget 2015 was unveiled on 28th February by the Finance Minister, Mr. Arun Jaitley. Key changes with regard to Income Tax have been proposed that would impact salary for employees. We have analyzed the changes to give you a quick rundown on various IT benefits.
Changes in Income Tax Benefits as per the New Budget
- Transport allowance [Section 10(14)]
- Exemption on transport allowance has been increased from Rs. 800 per month to Rs. 1,600 per month.
2. Medical Insurance premium [Section 80D]
- For an Individual [Self], Spouse and dependent children, the maximum deduction under this section has been increased from Rs. 15,000 per year to Rs. 25,000 per year.
- In the case of an Individual [Self], Spouse and dependent children where one or more of them is a Senior Citizen [60 years and above], the maximum deduction under this section has been increased from Rs. 20,000 per year to Rs. 30,000 per year.
- For an Individual who is not covered by Health Insurance and is aged over 80 years, the maximum deduction under this section will be up to Rs. 30,000 per year.
3. Medical treatment of Specified Diseases. [Section 80DDB]
- No changes w.r.t treatment for specified diseases if the dependent is not a Sr. Citizen.
- Deduction w.r.t treatment of dependent Sr. Citizen for specified diseases has been increased from Rs. 60,000 per year to Rs. 80,000 per year.
4. Medical treatment of Handicapped Dependent [Section 80DD]
- Deduction w.r.t treatment of Handicapped dependent has been increased from Rs. 50,000 per year to Rs. 75,000 per year.
- Deduction w.r.t treatment of Handicapped dependent, if the disability is greater than 80% has been increased from Rs. 1,00,000 per year to Rs. 1,25,000 per year.
5. Medical treatment of Individual [Self] – [Section 80U]
- Deduction w.r.t treatment of Handicapped Individual [self] has been increased from Rs. 50,000 per year to Rs. 75,000 per year.
- Deduction w.r.t treatment of Handicapped individual [self], if the disability is greater than 80% has been increased from Rs. 1,00,000 per year to Rs. 1,25,000 per year.
6. Investment in Sukanya Samriddhi Scheme [Section 80C]
- Investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C. Maximum deduction of all savings under section 80C including Sukanya Samriddhi Scheme will be Rs. 1,50,000 per year.
- All payments to beneficiaries including interest payment on deposit will also be fully exempt.
7. Additional Investment under New Pension Scheme [Section 80CCD]
- Additional Investment in New Pension Scheme has been added under Chapter VI-A. Individuals can now get a benefit of Rs. 50,000 per year under this section, which is over and above 80C Rs. 1,50,000.
8. Increase of Surcharge from 10% to 12%
- Surcharge on Individual’s salary has been increased from 10% to 12%. Surcharge is applicable only if the Individual’s Net Taxable Income exceeds Rs. 1 Crore.
Effective date of Implementation: Changes are effective for the next financial year (April 2015 – March 2016). You are encouraged to modify your income tax declaration in the month of April 2015 to utilize the revised benefits.
Please connect with your Customer Success Manager should you need further clarifications on these changes under Income Tax Benefits. Alternately, you could drop us an email with your query on email@example.com with subject line IT Benefits – 2015.