Salaried taxpayers have no reason to cheer as finance minister Arun Jaitley did not announce any major tax breaks or changes in income tax slabs when he presented the Union Budget 2016 on Monday.
Minor exemptions and rebates include relief for those earning annual salaries of up to Rs 5 lakh. The tax rebate for this group has been increased from Rs 2,000 to Rs 5,000 under Section 87 A of the Income Tax Act.
This means there will be a reduction of Rs 5,000 from the tax amount paid by people with salaries of up to Rs 5 lakh or below. Previously, this rebate was Rs 2,000.
Another exemption announced in the budget for the salaried class is under Section 80 GG of the Income Tax Act.
This exemption is for those who do not earn any house rent allowance (HRA) as part of their salaries and can now claim relief up to Rs 60,000 for renting an accommodation. Previously, this exemption was up to Rs 24,000.
Going against wide speculation and expectations, the finance minister did not provide any significant relief for personal income tax.
He did not provide any respite under Section 80C that offers tax breaks for money parked under tax savings products such as insurance premium, mutual funds and provident funds, among other instruments.
Experts point out that this is on expected lines as governments generally offer big tax breaks usually in their first two years or last year.
The finance minister said that the loss to the exchequer for doling out the income tax exemptions and rebates will be Rs 1,060 crore.