Finance Minister Arun Jaitley has announced his third Union Budget. A lot of announcements were made but it didn’t come with a lot of bells and whistles. The budget 2016-17 did not announce any major relief for individuals, but it did announce a lot of positive things.
If you are wondering how the budget 2016 is going to impact your pocket, then you have reached the right place. Read on to find out how budget 2016-17 is going to impact your wallet.
How Union Budget 2016-17 Will Impact You
Following are some announcements of Union budget 2016-17, which will impact you and your wallet:
1. Tax Relief
The Finance Minister has announced tax relief for small tax payers. He proposed tax rebate from Rs. 2,000 to Rs. 5,000 for individuals with income not exceeding Rs. 5 lakh per annum. Under 87A, small tax players with income up to Rs. 5 lakh will get relief of Rs. 3,000.
Tax deduction on housing rent, has been increased from Rs. 24,000 to Rs. 60,000 per annum. First time home buyers will get additional deduction of Rs. 50,000 on a loan of up to Rs. 35 lakh, provided that the cost of house is not above Rs. 50 lakh.
3. 40% Tax Exemption For NPS
The Finance Minister has also announced an exemption for withdrawal of up to 40% of the corpus at the time of retirement, under NPS (National Pension Scheme). Moreover, recognized provident funds such as EPF will now follow the same norms as the NPS.
4. Buying A Car Will Become Costly
Apart from additional 1% tax on luxury cars above Rs. 10 lakh, the government will impose 1% Infrastructure cess on small petrol, CNG and LPG cars; 2.5% on diesel cars and 4% on other high capacity engine vehicles and SUV’s.
5. Tobacco Products Will Cost More
6. Krishi Kalyan Tax
Under Krishi Kalyan Tax, 0.5% tax will be levied on all taxable services, due to which services including watching movies, dining in restaurants will become expensive.
7. Jewelry Becomes Costlier
The custom duty on imported imitation jewelry has also been increased from 10% to 15% which will result in hike in jewelry prices.
8. No Service Tax For Houses Built Under 60 Qquare Meter
Those houses which are build under 60 square meters area will not be levied with service tax.
9. Small, Medium Shops To Open On All 7 Days A Week
Mr. Jaitley also announced that small and medium shop owners should be given a choice to remain open on all 7 days a week.
The budget 2016-17 is a mixture of positives and negatives. On one hand, it has relieved some individuals such as small tax payers, but on the other hand, it will make people shell out more money for services such as watching movies, dining at restaurants and more.
Also Read: Highlights Of Railway Budget 2016-17