Monday 19 April 2021

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Economy | Budget

Income Tax Changes Can Save You up to Rs. 36,000

 

Finance Minister Arun Jaitley's Budget announcements will lead to big savings for income tax payers.

Mr Jaitley on Thursday hiked the basic exemption limit on income taxes from Rs. 2 lakh to Rs. 2.50 lakh.

Mr Jaitley also hiked the cap on long-term investments under Section 80C of the Income Tax Act from Rs. 1 lakh to Rs. 1.50 lakh. The Finance Minister also raised the tax-free cap on interest paid on housing loan from Rs. 1.5 lakh to Rs. 2 lakh.

Together, the three announcements will lead to a combined savings of Rs. 36,050 for individuals in the highest tax bracket (taxable income above Rs. 10 lakh), according to tax consultant BMR Advisors.

Individuals with taxable income between Rs. 5 and 10 lakh will save Rs.25,750, BMR Advisors said. Those with taxable income between Rs. 2 and Rs. 5 lakh will save around Rs. 15,450.

In another major announcement, Mr Jaitley enhanced the Public Provident Fund (PPF) ceiling from current Rs. 1 lakh to Rs. 1.5 lakh in a financial year. PPF is one of the most popular tax-saving schemes. 

The PPF corpus is tax-free at all three stages. The investment is eligible for tax deduction under Section 80C. The interest earned is also tax-free, and so are withdrawals.

Mr Jaitley said the government will forego around Rs. 22,000 crore on account of these changes.

Original Report


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Jose Rod , Goa

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