The FM’s Budget 2016 gave relief to individuals specifically to salaried individual. The relief is being provided by raising exemptions and deductions or by rising of rebate. While the small taxpayers are enjoying whatever they have been served in the Budget, rich are overburdened with the tax. To tax rich, Budget raises Surcharge to 15%.

In the budget 2016, finance minister has increased the surcharge on income tax levied on individuals earning income of Rs 1 crore or more from 12 per cent at present to 15 per cent. This move is aimed at taxing the super-rich.

 

In a relief to small tax payers, the Budget highlighted:

• Raised the ceiling of tax rebate under Section 87(A) from Rs 2,000 to Rs 5,000 for incomes not exceeding Rs 5 lakh per annum
• 80GG deduction raised to 60000
• NPS withdrawal become tax free

 

On income above Rs 1 crore a surcharge of 12 per cent of income tax is additionally levied on the income tax computed and then the 3 per cent cess is further levied on the total of tax plus surcharge. The big changes for your money are at the fringes—both at the lower and the upper fringe. People earning more than Rs.1 crore will now see the surcharge on income tax go up to 15% from 12% in the current fiscal year.

 

This will put an additional tax burden of Rs 92,700 on individuals having a net taxable income of Rs 1 crore. Due to the surcharge hike, the tax rate for the highest slab jumps to 35.5 per cent.

For return filing contact us @ taxmantra.com

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