Budget 2015: Health insurance brings more tax benefits for individuals
Under section 80 D for paying medical insurance premium earlier the deduction allowed was Rs. 15000 which has now been increased to Rs. 25000, which means by additional saving of Rs. 10000, the tax saving will be Rs. 3000 who are in 30% tax bracket and Rs. 1000 for those who are in 10% tax bracket.
Recently announced Budget by Finance Minister is mixed Budget, there is a cheerful news for tax payers as there has been specific extra tax deductions which has been allowed, under section 80 D and section 80CCD. Let us understand this one by one, Under section 80 D for paying Health Insurance Tax Benefits premium earlier the deduction allowed was Rs. 15000 which has now been increased to Rs. 25000, which means by additional saving of Rs. 10000, the tax saving will be Rs. 3000 who are in 30% tax bracket and Rs. 1000 for those who are in 10% tax bracket. As premium was going up from last few years along with medical expenses which has sky rocketed from last few years, extra rebate in premium is much needed, so it was a welcome relief which was announced by FM. Apart from that another relief which has been provided for the tax payers is in the shape of additional deduction in Tax by providing for your pension, under Section 80 CCD if one contributes to National Pension Saving Scheme, an additional rebate of Rs. 50000 will be allowed as deduction from your income, giving you a relief of Rs. 15000 if you are in 30% of tax bracket. Like FM mentioned that he wants a secure and brighter India rather than a pension less India, so it is the interest of the tax payer that they should start their planning for pension, the beginning age to start saving through NPS is 18 years and the vesting age is 60 years. So this is good news for all those who are in the age bracket of 18 years to 59 years as they can start saving in NPS and add up claim deduction up-to Rs. 50000. If we add up these rebates extra concession, which has been given apart from Section 80 C which is already there in the shape of Rs. 1.5 lakhs.
The total the tax payer can save now is Rs. 69525, if someone claims maximum possible deduction under section 80C, 80D and Under Section 80CCD. Apart from these there have been some good announcements for Super Senior Citizens i.e. a person above 80 years of age. For them additional allowance of Rs. 30000 for expenditure incurred for treatment on certain specified diseases has also been allowed. So, it will be also a big relief for large chunk of population who are above then the age of 80 years and are spending big amounts on medical treatments, they will get some extra tax relief on that. In addition to these concession to tax payers, Finance Minister also announced that for High Net Worth Individuals, those who are looking for tax free income, Tax free bonds will be allowed to be issued by big corporations which are engaged in funding for long term infra-structure projects. Big corporation like Indian Railway Finance Corporation, Power Finance Corporation, National Highway Authority of India and few others will be allowed to offer Tax free Infrastructure Bonds to Public for the period of 5-10 years, the details are still awaited. The amount which has been mentioned to be raised through Tax Free Bonds is Rs.
70000 crore in the next financial Years. Its a big announcement for Rich people of our country as they can park their surplus funds in these Tax Free bonds and can continue to get inflation beating safe returns. If we look the Budget 2015 in common men point of view, the increase of service tax from 12.36 to 14% has neutralized many of these benefits. Because the increase in service tax will have an Impact in every strata of society, be it housewives, students, salaried people or business men, because they all consuming different services be it going to beauty salon, hair saloon, restaurant, paying mobile bills, cable bills etc. So this 2% increase will have a negative impact on the overall relief that one can expect from this Budget. As far as the Wealth Tax for rich people, this can be seen as a pro-rich moment but simultaneously FM has also announced that the surcharge on High Net worth People, whose income is more than Rs. 1 crore, will be increased from 10% to 12%. So it’s a very clever tactic on the one hand, complete wealth tax has been abolished and on the other hand surcharge has been increased from 10% - 12%. On this account, overall revenue of Government will not on this account. In nutshell, this has been a mixed budget and fallen short of the big bang reforms which many of us were expecting, the tax slabs has not been changed, the minimum exemption limit still remain continue to remain at Rs. 2.5 lacs. But keeping in mind the reliefs announced Under Section 80CCD extra, some expectations have been met, that's why we are saying it's a mixed Budget.
Post Your Ad Here
Comments