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Budget Personal tax Points
Poposal (P): Increase the rate of surcharge on income exceeding Rs 1
crore to 15% from 12%.
Impact (I): This will raise the maximum marginal rate of tax to 35.54% from
34.61% on the 'super-rich'.
P: Increase limit for tax rebate to Rs 5,000 from Rs 2,000 for resident
individuals with a total income of up to Rs 5 lakh a year.
I: This will ens ure an additional saving of Rs 3,090 for small taxpayers.
P: Raise deduction limit for rent paid by an individual who doesn't have a
house and isn't entitled to HRA from the employer to Rs 60,000 pa from Rs
I: This will allow the individual to claim an additional deduction of Rs 36,000
pa, leading to a tax-saving of up to Rs 13,015.
P: Under the current provisions, dividend received by an individual from an
Indian company is exempt from tax as dividend distribution tax (DDT) is
already paid by the firm. It is proposed to charge the individual an
additional tax at 10% on the dividend received in excess of Rs 10 lakh.
I: This will ens ure that dividend earned by super-rich is also subject to tax
in addition to the 15% DDT paid by Indian firms. The maximum effective tax
that the dividends bear will be 32.21% (i.e. 20.36%+11.85%).
P: Make gains under the Sovereign Gold Bond Scheme, 2015, exempt
from tax. Also, provide indexation benefit on transfer of the gold bonds.
I: This will give incentive for investing in gold bonds instead of the physical
P: For rupee-denominated bonds, give tax exemption to non-resident
investors on gains arising from currency appreciation between the dates of
issue and redemption.
I: This will attract non-resident investors to rupee-denominated bonds and
help Indian companies raise funds abroad.
P: Don't subject NRIs to higher rate of TDS due to unavailability of PAN if
they fulfil certain conditions.
I: This will bring significant relief to NRIs.
P: Introduce e-assessment and do away with physical presence during tax
I: This will lead to an increase in paperless assessment and less face-to-
face interaction between taxpayer and income-tax officers.
P: Increase the threshold limit for TDS in case of withdrawal of PF
balances to Rs 50,000 from Rs 30,000.
I: Individuals with accumulated PF balances of up to Rs 50,000 will now not
be subject to TDS on withdrawal.
P: Individuals with rental income less than the maximum amount not
chargeable to tax should furnish Form 15G/15H for non-withholding of
I: This will bring huge relief to senior citizens and small taxpayers who have
nil taxable income or income below the threshold limit but had to file I-T
return to claim refunds of TDS deducted on rental income.
P: Include exempt income from long-term capital gains on sale of equity
shares or equity-oriented mutual funds to determine whether an individual
is liable to file I-T return.
I: To determine the requirement for filing a tax return, long-term capital
gains on sale of equity shares or equity-oriented mutual funds that are
exempt from tax also need to be included. Also, individuals with only
exempt income from long-term capital gains on sale of equity shares or
equity-oriented mutual funds will now be required to file return if the total
exempt income exceeds the maximum amount not chargeable to tax
(currently Rs 2.5 lakh).
P: Reduce the time-limit for filing of belated return to any time before the
end of the assessment year or completion of assessment, whichever is
earlier. However, allow a belated return to be revised within a year from the
end of the relevant assessment year or completion of assessment,
whichever is earlier.
I: This will reduce the time-limit for filing a belated return to one year from
two years and encourage timely compliance. Revision of belated return will
now be permitted, which was not possible earlier.
P: Amend advance tax payment schedule for individuals as (a) 15% of tax
payable by June 15; (b) 45% of tax payable by September 15; (c) 75% of
tax payable by December 15; and (d) 100% of tax payable by March 15.
I: This will increase the compliance burden.
P: Don't subject to tax shares received by an individual in consequence of
demerger or amalgamation of firms without adequate consideration.
I: This will bring uniformity in tax treatment of shares.