Union Budget 2016: 11 major tax-related announcements

Know about the key 11 tax-related announcements proposed by Finance Minister Arun Jaitley in Budget 2016-17.

Zee Media Bureau

New Delhi: While making no change in personal Income Tax slabs in the Union Budget 2016-17, Finance Minister Arun Jaitley on Monday announced deduction for additional interests of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17 for first time home buyers, where house costs does not exceed Rs 50 lakh.

Here are the key tax-related announcements:

-Raise the ceiling of tax rebate under section 87A from Rs 2000 to Rs 5000 to lessen tax burden on individuals with income upto Rs 5 laks.

-Increase the limit of deduction of rent paid under section 80GG from Rs 24000  per annum to Rs 60000,  to provide relief to those who live in rented houses.

-Deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35  lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs 50 lakh.

-Additional tax at the rate of 10% of gross amount of dividend will be payable by  the recipients receiving dividend in excess of Rs 10 lakh per annum.

-Surcharge  to  be  raised  from  12%  to  15%  on  persons,  other  than companies, firms and cooperative societies having income above Rs 1 crore.

-Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of Rs  ten lakh and purchase of goods and services in cash exceeding Rs two lakh.

-Securities  Transaction  tax  in  case  of  ‘Options’  is  proposed  to  be increased from .017% to .05%.

-Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016. Proceeds would be exclusively used for financing initiatives for improvement of agriculture and welfare of farmers.  Input tax credit of this cess will be available for payment of this cess.

-Infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles
and SUVs.  No credit of this cess will be available nor credit of any other tax or duty be utilized for paying this cess.

-Excise duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewellery [excluding silver jewellery, other than studded with diamonds and some other precious stones], with a higher exemption  and   eligibility  limits  of Rs 6   crores  and Rs 12   crores respectively.

-Excise duties on various tobacco products other than beedi raised by about 10 to 15%.