Budget Benefits to Middle Class & Tax measures to promote Swatch Bharat Initiatives

[Deepak Aggarwal]

Benefits to Middle Class Tax Payers in the Budget 2015-16

• Deduction for Health insurance premium increased from ₹ 15,000 to ₹ 25,000
• Deduction for Health Insurance premium in case of Senior citizen increased from ₹ 20,000 to ₹ 30,000.
• For senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for ₹ 30,000 toward medical expenditure
• Deduction limit of ₹ 60,000 on expenditure on account of specified diseases is enhanced to ₹ 80,000 in the case of senior citizens.
• Additional deduction of ₹ 25,000 is allowed for differently-abled persons, increasing the limit from ₹ 50,000 to ₹ 75,000.
• It is also proposed to increase the limit of deduction from ₹ 1 lakh to ₹ 1.25 lakh in case of severe disability.
• Investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C of the income-tax. All income will be tax free.
• Limit on deduction on account of contribution to a pension fund and the new pension scheme is proposed to be increased from ₹ 1 lakh to ₹ 1.5 lakh.
• Additional deduction of ₹ 50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD.

Tax Measures Announced to Promote Swatch Bharat Initiatives and Public Health in the Budget 2015-16

• Swatch Bharat Cess on all or certain taxable services at a rate of 2% from a date to be notified
• Scheduled rate of Clean Energy Cess levied on coal lignite and peat is being increased form ₹ 100 per tonne to ₹ 300 per tonne
• The effective rate of Clean Energy Cess is being increased from ₹ 100 per tonne to ₹ 200 per tonne
• Excise duty on sacks and bags of polymers of ethylene other than for industrial use is being increased from 12% to 15%.
• Concessional customs and excise duty rates on specified parts of Electrically Operated Vehicles and Hybrid Vehicles, presently available up to 31.03.2015, is being extended up to 31.03.2016.
• To promote public health, Excise duty on cigarettes is being increased by 25% for cigarettes of length not exceeding 65 mm and by 15% for cigarettes of other lengths
• Similar increases are proposed on cigars, cheroots and cigarillos
• Maximum speed of packing machine is being specified as a factor relevant to production for determining excise duty payable under the Compounded Levy Scheme presently applicable to pan masala, gutkha and chewing tobacco.
• Excise duty on chassis for ambulances is being reduced from 24% to 12.5%.