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Finance minister Arun Jaitley raised the exemption limit in personal income tax from Rs 2 lakh to Rs 2.5 lakh. He also raised the tax exemption limit for investments to Rs 1.5 lakh from the current Rs 1 lakh under Section 80C of the Income Tax Act.
Not just that, the minister raised the tax deduction limit to Rs 2 lakh from Rs 1.5 lakh on interest for housing loans in case of self-occupied property while the public provident fund (PPF) investment limit has also been raised to Rs 1.5 lakh from the current Rs 1 lakh.
In a nutshell, these measures do not only mean more money in your hands, there will also be more incentives to park it in national savings certificates (NSC), five-year fixed deposits, repayment of principal amount of home loans, children’s tuition fees, specific mutual funds and life insurance premium among other things. The three income tax slabs — at 10%, 20% and 30% — however, have been left undisturbed.
“It is a good budget, as it will leave people with more money, which will offset the inflation burden to a large extent,” said Girish Vanvari, co-head, tax, KPMG. “It will channelise savings, while also leading to a lower tax burden.”
Sunil Shah, partner, Deloitte Haskins & Sells LLP, echoed a similar sentiment. “The enhancement in the personal exemption limits and in the ceiling for savings instruments and interest on house loans will provide relief to individual taxpayers,” he said.
The finance minister also raised the tax exemption limit for senior citizens from Rs 2.5 lakh to Rs 3 lakh.