7/24/2019 UB 2016 Impact

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H I N D U S T A N T I M E S , T U E S D A Y , M A R C H 0 1 , 2 0 1 6

7From the personal financeperspective, while there were nosubstantial changes in theindividual tax slabs, individualsstand to gain through severalbudget proposals, finds FPSBIndia Knowledge Team

For individual tax payers with income up to`5,00,000,rebate has been raised to `5,000.

Section 80GG seeks to benefit the self-employedwho do not get HRA with a rebate of `60,000

For first time buyers of houseproperty the budget has provided

for an additional deduction of interestof `50,000where the value of thehouse is under `35 lakh.

Surcharge on individual assessees with income above `1 croreto be raised to 15%from 12%; Tax collection at source at the rate

of 1%while purchasing luxury cars which are priced above `10 lakhsand on goods and services above `2 lakhs; STT on Options to beincreased to 0.05%from 0.017%; Infrastructure cess ranging from1%to 4%on various capacities of cars etc.

Also, in yet more relief forsenior citizens 40%of the

corpus withdrawal from NPSshall be tax free.

Dividend Distribution Tax for those earning dividend inexcess of `10 lakhper annum will be required to pay

additional dividend tax of 10%.

The net impact of these twoproposals to the budget is expected

to put cash quivalent to `39,000in thehands of eligible people.

This will benefit home buyers for theadditional exemption even if a loan of

`25 lakhis availed at 10%p.a. interest for15 to 20 years. This could prove to be anincentive for first-time home buyers

This implies an incremental saving of taxas prevalent rules provided for 33.33%of

withdrawal corpus as tax free. This is anothergood reason for investing in NPS.

Above

proposals willlead to increasedexpenses for higherincome groups.

This will lead to alower return from

investments.

Existing income-tax slab: 10% for taxable income between `2.5lakh and 5 lakh, 20% for taxable income between`5 lakh and`10 lakh and 30% for liability above`10 lakh. Further, wheretotal income exceeds one crore rupees, the amount of income-tax shall be increased by surcharge @ 12% of tax. Total tax(including surcharge, if any) is to be further increased by 3% onaccount of cess. Calculations take into account section 87Aexemptions

Increase in tax rebate under Section 87A of the IncomeTax Act, 1961 from `2,000 to `5,000

No change in tax slabs; Rate of surcharge increased by3% for income above `1 crore i.e. total 15%

The above calculations does not take into account anyproposed changes in Chapter VIA deductions

SOURCE: DELOITTE

Redemption by an individual Sovereign GoldBond under the Sovereign Gold Bond Scheme

2015 shall not be charged to capital gains tax.Further. long term capital gains arising on transferof Sovereign Gold Bond would be eligible forindexation benefits.

The budget has provided for a healthcover of `1,00,000per year (`30,000

additional for Senior Citizens) under theHealth Protection Scheme.

The incentives will makethe scheme more attractive

and popular for all investorslooking to invest in this assetclass for a medium to long termperiod of 5 to 7 years.

This measure will benefit senior citizensmore as they have to pay a premium for

seeking health cover and the measure getstranslated into cash savings for them.

PROPOSALSAND THEIRIMPACT

`

39,000

Relief undersection

80GG etc.

SAVINGS & CASH FLOWS

`50,000Additionaldeduction forfirst-timehome buyers

LONG-TERM OBJECTIVES

10%INVESTMENTS

`1 lakhRISK MANAGEMENT & INSURANCE

15%SPENDING AND EXPENSES

PROPOSALS IMPACTS

TOP FIVEBILLIONAIRES

TAX EXEMPTION

How the wealth of therichest Indians changed onthe Budget day, when theBSE Sensex fell almost 1%

INDI UNINTERRUPTEDINDIA UNINTERRUPTED

WORKING MEN& WOMEN

NETTAXABLEINCOME

in lakh

SENIORCITIZENS

Tax earlier Tax now Savings

00

3,0900 03,0903

18,54015,450

23,69020,600 3,0903,0905

82,40082,40087,55087,550 0081,23,6001,23,600

1,28,7501,28,750 0010

5,87,1005,87,100

5,92,2505,92,250 0025

13,59,60013,59,600

13,64,75013,64,750 0050

29,04,60029,04,600

29,09,75029,09,750 00100

35,99,23236,95,640

36,05,00037,01,563 -96,408-96,563110

67,13,95268,93,790

67,19,72068,99,713 -1,79,838-1,79,933200

1,01,74,7521,04,47,290

1,01,80,5201,04,53,213 -2,72,538-2,72,693300

1,70,96,3521,75,54,290

1,71,02,1201,75,60,213 -4,57,938-4,58,093500

Existing exemption slab

2,50,000

Proposed exemption slab

UNCHANGED

Existing exemption slab

5,00,000

Proposed exemption slab

UNCHANGED

-0.84%

METHODOLOGY: The wealth has beencalculated on the basis of individualshareholdings in companies that theabove persons own or have a controllingstake. The change in share prices ofthese companies is reflected in theincrease or decrease in their wealth

CONCLUSION:Though this budget is not big from the perspective of personal finance, different sec-tions can derive commensurate benefits as per their situations for example first time home buyers,self-employed individuals and entrepreneurs on the positive side.

(By Ranjeet S Mudholkar, VC & CEO, FPSB India)

On Friday `1.44L cr

Mukesh Ambani,

Chairman, RIL

`1.46

1.66%

lakh crore

On Friday`1.19 L cr

Dilip Shanghvi,MD, Sun Pharma

`1.17lakh crore

On Friday `0.91L cr

Azim Premji,Chairman, Wipro

`0.89lakh crore

On Friday `0.85 L cr

KM Birla,Chairman, Aditya Birla Group

`0.85lakh crore

On Friday `0.7 L cr

Shiv Nadar,Chairman, HCL

`0.69lakh crore

-1.84%

-2.25%

-0.4%

Additional dividendtax on dividend over`10 lakh per annum

Insurance coverunder the HealthProtection Scheme

Surcharge on individualswith income above `1 croreagainst the previous 12%

P r i nte d a nd d i s tr i b ute d b y P r e s s Re a d e r

C O P Y RI G H T A N D P R O T E CT E D B Y A P P L I C A BL E L A W

P r es s Re a de r. c om + 1 6 04 2 78 4 6 04 O R I G I N A L C O P Y O R I G I N A L C O P Y O R I G I N A L C O P Y O R I G I N A L C O P Y O R I G I N A L C O P Y O R I G I N A L C O P Y