 "Ravi Jain")
Proposed exemption on partial withdrawal and raising of the exemption limit for non-employees raised to 20% will make the National pension scheme more attractive for common man, said Ravi Jain, Executive Director, Personal Tax, PwC. He also added that revised tax slab will help in widening the tax base of the country. Edited Excerpts
Income Tax above Rs 5 lakh seems to be very disappointed. How smartly can one save tax?
The change of tax rate for the slab Rs 2.5 to 5 lakh will also generate tax savings for income group upto Rs 50 lakhs. Therefore, don’t be disappointed and you should avail the tax saving measures to plan your taxes better.
What are the far-reaching consequences of the revised tax slab?
Besides, the tax savings to lower income group and an additional tax for higher income group of above Rs 50 lakhs (refer to my earlier answers for precise numbers), this will help in widening the tax base of the country.
What will be the impact of the Budget on the tax liability of people earning around Rs 40 lakh annually?
There will be a tax saving of around Rs 12,875.
Has the Budget made the rich people poor and poor people rich?
The tax rates for income group between Rs 2.5 to 5 lakh has been reduced to 5% which will result in a saving ranging from Rs 2,500 to 7725 depending on the income level. Those earning income above Rs 50 lakh will have to pay a surcharge of 10% which could result in an additional tax of about Rs 2,76,812 depending on the income level.
A person with taxable income of Rs 3.5 lakh will pay a tax of Rs 2,575 as against Rs 5,150 payable earlier. Will home loan be taken into account to avoid this tax
Under section 80C/24(b), you will be eligible to claim deduction towards principal repayment of housing loan/ interest repayment subject to applicable limit.
How does one minimise minimum surcharge of 10% on income of above Rs 50 lakh?
As per the marginal relief provisions, your surcharge shall be limited to the amount by which your income exceeds Rs 50 lakhs, in case you just crossed the 50 lakhs limit.
Do you think carrying forward of MAT upto a period of 15 years instead of 10 years is a good idea?
For small & mid size companies extending the carry forward, the new time limit would be useful specifically when the MAT tax rate has not been reduced.
It is proposed to amend the Section 10 so as to provide exemption to partial withdrawal not exceeding 25% of the contribution made by an employee under Pension Fund Regulatory. How will it affect the common man?
Proposed exemption on partial withdrawal and raising of the exemption limit for non-employees raised to 20% will make the National pension scheme more attractive for common man to subscribe.
Budget has proposed that Individuals and HUFs paying rent of Rs 50,000 or more per month will now have to deduct 5% tax at source. Is this a good move?
It will help the revenue in better tax administration. While the withholding obligations is put on individual but the individual is not required to take TAN registration to keep it simple for the individual deductor.
Until this year, we can show only Rs 1.5 lakhs in savings under 80C, is there any change from this year onwards. Please advice
No. The limit remains the same.
What are your views on the tax deductions in the Budget? Do you think there should have been more for people upto Rs 12 lakh income?
As per current budget proposals, the tax saving for income upto 12 lakh is in the range of Rs 12,000. However, more deductions are always welcome but the government has to do the balancing act of maintaining the fiscal deficit as well.
