Budget 2015: Top takeaways for the common man

Posted by Unknown on 10:51 in Budget 2015 General Knowledge on Taxation | Comments : 0

In a budget that had several firsts, Finance Minister Arun Jaitley in hisbudget speech announced a slew of tax measures and personal savings schemes aimed at benefiting the taxpayer and common man.

While tax exemption limits for various schemes were hiked, new methods to monetise gold were also announced. We take a look at the major takeaways for the common man from Budget 2015.

Keep watching this space for updates on how the Budget benefits you...

1) Tax exemptions: The limit of reduction of health insurance premium was enhanced from Rs 15,000 to Rs 25,000. For senior citizens this limit has been increased from Rs 20,000 to Rs 30,000.

"For senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure. Deduction limit of Rs 60,000 on expenditure on account of specified diseases is enhanced to Rs 80,000 in the case of senior citizens," Jaitley said.

Additional deduction of Rs 25,000 is allowed for differently-abled persons, increasing the limit from Rs 50,000 to Rs 75,000. It is also proposed to increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.

Jaitley also proposed to provide that investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C of the income-tax and any payment from the scheme shall not be liable to tax.

Limit on deduction on account of contribution to a pension fund and the new pension scheme is proposed to be increased from Rs 1 lakh to Rs 1.5 lakh.

Additional deduction of Rs 50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD increasing from Rs 1 lakh to Rs 1.5 lakh.

2) Transport allowance: The transport allowance for salaried, which currently stands at Rs 800 per month was increased to Rs 1,600 per month.

3) Universal Social Security System: Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, the Finance Minister proposed to work towards creating a universal social security system for all Indians, specially the poor and the under-privileged.

Jaitley said that soon Pradhan Mantri Suraksha Bima Yojana will be launched to cover accidental death risk of Rs 2 lakh for a premium of just Rs 12 per year.

Similarly, we will also launch the Atal Pension Yojana, which will provide a defined pension, depending on the contribution, and its period. To encourage people to join this scheme, the government will contribute 50% of the beneficiaries' premium limited to Rs. 1,000 each year, for five years, in the new accounts opened before 31st December, 2015.

Jaitley also announced a third Social Security Scheme, the Pradhan Mantri Jeevan Jyoti Bima Yojana, which covers both natural and accidental death risk of Rs 2 lakh. The premium will be Rs 330 per year, or less than one rupee per day, for the age group 18-50.

4) For employees under EPF: Jaitley announced that with respect to Employees Provident Fund (EPF), the employee needs to be provided two options. Firstly, the employee may opt for EPF or the New Pension Scheme (NPS). Secondly, for employees below a certain threshold of monthly income, contribution to EPF should be optional, without affecting or reducing the employer's contribution.

He said, with respect to ESI, the employee should have the option of choosing either ESI or a Health Insurance product, recognized by the Insurance Regulatory Development Authority ( IRDA).

5) No change in tax rate: Jaitley in his Budget Speech in proposed no change in the rate of personal Income-tax. However, Jaitley proposed to levy a surcharge at the rate of 12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding Rs 1 crore.

6) Monetising gold: In an innovative move, Jaitley announced several steps for monetizing gold. Jaitley said that stocks of gold in India are estimated to be over 20,000 tonne but mostly this gold is neither traded, nor monetized. He proposed to introduce Gold Monetisation Scheme, which will replace both the present Gold Deposit and Gold metal Loan Schemes.

The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal account. Banks/ other dealers would also be able to monetize this gold.

FM also announced the development of an alternate financial asset, a Sovereign Gold Bond, as an alternative to purchasing metal gold. The bonds will carry a fixed rate of interest, and also be redeemable in case in terms of the face value of the gold, at the time of redemption by the holder of the bond.

Government shall commence work on developing an Indian Gold Coin, which will carry the Ashok Chakra on its face. Such an Indian Gold Coin would help reduce the demand for coins minted outside Indian and also help to recycle the gold available in the country, Jaitley said.

7) Job creation via Make in India: To promote creation of jobs, Jaitley announced a series of cuts in customs and excise duties in the Budget. Customs duties on certain inputs like metal parts, insulated wires and cables, refrigerators compressor parts, compounds used in catalytic converters, sulphuric Acid for use in manufacture of fertilizers and compounds of video Cameras have been reduced.

SAD is reduced in Metal scrap of iron & steel, copper, brass and aluminum from 4% to 2% to address problem of CENVAT credit accumulation. For inputs for use in the manufacture of LED driver and MCPCB for LED lights, fixture and LED lamps SAD is reduced from 4% to Nil.

8) Education: With a move to up the employability of youth, the government will launch a National Skills Mission through the Skill Development and Entrepreneurship Ministry.

The Mission will consolidate skill initiatives spread across several Ministries. Jaitley also proposed to set up an IIT in Karnataka, and upgrade Indian School of Mines, Dhanbad into a full fledged IIT. IIMs will be set in J&K and Andhara Pradesh, FM added.

Three new National Institutes of Pharmaceuticals Education and Research are proposed to be set up in Maharashtra, Rajasthan and Chattisgarh along with Institutes of Science and Education Research in Nagaland and Odisha.

For the North Eastern States, a Centre for Film Production, Animation and Gaming will be set up in Arunachal Pradesh while an Apprenticeship Training Institute for Women will be set in Haryana and Uttarakhand during 2015-16.

To enable all poor and middle class students to pursue higher education of their choice without any constraints of funds, a fully IT based Student Financial Aid Authority is proposed to be set up during the year 2015-16.