2. For people with net taxable income below Rs 5 lakh, the tax rebate has been increased from Rs 2,000 to Rs 5,000 u/s 87A. This would benefit people who have net taxable income between Rs 2.7 Lakhs to Rs 5 Lakhs.
3. Additional exemption for first time home buyer up to Rs. 50,000 on interest paid on housing loans. This would be applicable where the property cost is below Rs 50 Lakhs and the home loan is below Rs 35 lakhs. The loan should be sanctioned on or after April 1, 2016.
4. Tax Exemption u/s 80GG (for rent expenses who do have HRA component in salary) has been increased from Rs 24,000 to Rs 60,000 per year. This is a good move to align the exemption amount with today’s rent and keep the section relevant.
5. For people with net taxable income above Rs 1 crore, the surcharge has been increased from 12% to 15%
6. Dividend Income in excess of Rs. 10 lakh per annum to be taxed at 10%
7. 40% of lump sum withdrawal on NPS at maturity would be exempted from Tax. This rule now also applies to EPF. So now in case of EPF income tax would be applicable on 60% of the corpus on maturity.
8. Presumptive taxation scheme introduced for professionals with receipts up to Rs. 50 lakhs. The presumptive income would be 50% of the revenues.
9. Exemption to employer’s contribution to recognized provident funds limited to 1.5 lakh. Earlier, the cap was up to 12% of salary.