Tax Proposal for employees in Budget 2014.

The summary of India budget impact only in respect of Income tax for employees is given below

 

1. Increase of Basic exemption limit: Major expectation of increase in basic exemption limit has been given in the budget; the limit has been increased from Rs.2 lakhs to Rs. 2.50 lakhs for individuals except senior citizens and for senior citizens between 60 to 80 years has been increased from Rs. 2.50 lakhs to Rs. 3 lakhs. The revised income tax slabs are given below the table

Rates for Individuals below 60 years

Income slabs	Income tax rate
Income up to Rs. 2.50 lakhs	Nil
Rs. 2.50 to Rs. 5 lakhs	10%
Rs.5 Lakhs to Rs. 10 Lakhs	20%
Rs. 10 lakhs above	30%

Rates for Individuals below 60 years below 80 Years

Income slabs	Income tax rate
Income up to Rs. 3 lakhs	Nil
Rs. 3 to Rs. 5 lakhs	10%
Rs.5 Lakhs to Rs. 10 Lakhs	20%
Rs. 10 lakhs above	30%

Rates for Individuals 80 years & above

Income slabs	Income tax rate
Income up to Rs. 3 lakhs	Nil
Rs. 3 to Rs. 5 lakhs	Nil
Rs.5 Lakhs to Rs. 10 Lakhs	20%
Rs. 10 lakhs above	30%

Note: No discrimination between male & female.

Surcharge of 10% on Income tax those taxable income exceeds Rs. 10 crore will apply.

Education cess will apply 3% on the Income tax & Surcharge will apply for all.

These changes in slab will give to individuals a minimum tax relief of Rs.5150

2. Increase in limit under section 80C: Very famous section among individuals is section 80C, the section gives rebate for various savings scheme till now Rs. 1 lakhs has been enhanced to Rs. 1.50 lakhs . This changes will give boost to habit of savings by the individuals and also give the minimum tax relief of Rs.5150 & maximum of Rs. 15,450/-.

3. Increase in Public provident fund: Present investment cap of Rs. 1 Lakh under PPF scheme has been enhanced to Rs.1.50 lakhs which will help in the cap under section 80C. This change will attract & help to make savings under PPF by the individuals

4. Increase in housing interest deduction: One more major section which individuals claim is housing loan interest under section 24. Existing limit of Rs.1.50 lakhs for self occupied property interest deduction has been enhanced to Rs. 2 lakhs. This will give the marginal tax relief of Rs.5150 & maximum of Rs. 15,450/- for those are claiming interest for self occupied property.

5. Increase tax rate on long term capital gain: Current tax rate on Long term capital gain has been increased from 10% to 20% on transfer of units of Mutual funds except equity oriented funds