With fresh incentives for individuals announced in the Union Budget today, the overall deduction limit under personal income tax has gone up to Rs 4,44,200 a year.
In the Budget for 2015-16, Finance Minister Arun Jaitley has proposed raising the tax deduction limit by Rs 10,000 for payment towards health insurance premium. At the same time, exemption of transport allowance has been doubled to Rs 19,200 per year..
To provide social safety net and the facility of pension to individuals, an additional deduction of Rs 50,000 is proposed to be provided for contribution to the New Pension Scheme under Section 80CCD, he said.
"This will enable India to become a pensioned society instead of a pensionless society," the FM said.
Other deductions namely -- deduction under section 80C of Rs 1.5 lakh while deduction under section 80CCD Rs 50,000 - have been maintained. Tax deduction on account of interest on house property loan( for self occupied property) has also been kept unchanged at Rs 2 lakh.
"Having raised the basic exemption limit and 80C limit etc last year, there was hardly any scope for further concession. Raising the limit of health insurance premium, transport allowance exemption and additional deduction of 50,000 for NPS will help taxpayers to save little more in taxes," PwC India Partner and Leader Personal Tax Kuldip Kumar said.