Drastic Income Tax Changes in the Past Union Budgets

We all know that the government comes up with something new every budget which leaves a great impact on individuals, corporates and the rest of the economy. The changes range from a change in tax slabs to changes in deduction limits and many more.

Let us have a brief overview of some drastic income tax changes which have occurred in the past few budgets -

Budget 2014

• Income tax exemption limit was raised by Rs 50,000 to Rs 2,50,000 and for senior citizens to Rs 3,00,000.
• Exemption limit for investment in financial instruments under 80C raised to Rs 1.5 lakh from Rs 1 lakh.
• Deduction limit on interest on the loan for self-occupied house hiked from Rs. 1.5 lakh to Rs. 2 lakh

Budget 2015

• Abolition of wealth tax
• Additional 2% surcharge for the super-rich with income of over Rs. 1 crore. It increased from 10% to 12%.
• Rate of corporate tax was reduced to 25% over the next four years.
• Service tax was increased to14 per cent.
• Additional Rs 50,000 deduction was given for contribution to NPS under Sec 80CCD(1b)

Budget 2016

• Excise duty was raised from 10% to 15% on tobacco products other than beedis.
• 1% service charge was levied on purchase of luxury cars over Rs.10 lakh
• Excise 1 per cent was imposed on articles of jewellery, excluding silver.
• 5% Krishi Kalyan Cess was levied on all services
• Dividends in excess of Rs. 10 lakh per annum were taxed at additional 10 percent.
• Increase in surcharge from 12 percent total income to 15 per cent, over Rs. 1 crore
• Tax rebate for individuals with income up to Rs. 5 lakh was raised from Rs. 2,000 to Rs. 5,000.
• Additional deduction up to Rs. 50,000 was announced on interest payment for first-time home loan borrowers (over and above Rs. 2 lakh)

Budget 2017

• Reduction in income tax rate on income of Rs. 2.5 lakh-5 lakh, from 10 per cent to 5 per cent
• Rebate under Section 87A was reduced from Rs. 5,000 to Rs. 2,500; no rebate on income above Rs. 3.5 lakh.
• Surcharge of 10 per cent on income of Rs. 50 lakh-Rs 1 crore

Budget 2018

• Increase in cess from 3% to 4%
• Social welfare surcharge of 10% was imposed on imported goods
• Standard deduction of Rs 40,000 for the salaried for transport and health.
• Senior citizen deduction for health insurance raised to Rs 50,000.
• 10 percent long-term capital gains tax on equity gains above Rs 1 lakh.
• Deduction limit for health insurance premium/medical expenditure increased from Rs. 30,000 to Rs. 50,000, under section 80D of Income Tax Act

Budget 2019

• PAN and Aadhaar now interchangeable
• Rs. 5 lakh minimum limit announced for taxpayers. Individual taxpayers with annual income up to Rs. 5 lakh enjoyed full tax rebate.
• TDS of 2% on cash withdrawals exceeding Rs. 1 crore in a year from bank accounts, to discourage business payments in cash.
• Standard deduction increased from Rs. 40,000 to Rs. 50,000
• Relief in securities transaction tax (STT)

Budget 2020

• A new tax regime has been announced. Those in the old regime with exemptions, can continue to pay at the old rates.
• Companies will no longer be required to pay Dividend Distribution Tax (DDT).
• Tax audit threshold has been increased from Rs 1 crore to Rs 5 crore provided turnover/ gross receipts in cash does not exceed 5% during the previous year.

Budget 2021

• Interest from PF contributions above Rs 2.5 lakh a year to be taxed as regular income.
• No IT filing for people above 75 years who get pension and earn interest from deposits
• Except in cases of serious tax evasion, assessment proceedings in the rest of the cases shall be reopened only up to three years, against the earlier time limit of six years.