The Union Budget 2016 seems to have all-inclusive growth for the rural India, with the government introducing more cess and surcharge on the economically stronger population.
As for the common-man, the daily office-goer, there seems very little for him to cheer, for the government has proposed to give him some benefits, while on the other hand take back in terms of new taxes.
Also read: Budget Highlights 2016
Here are the top five Budget proposals that will impact the common man.
The Cheers…
1. No change in income-tax, but small hike in rebate for those earnings less than or equal to Rs 500,000 annually. The person will now be eligible for Rs 5,000 rebate as against the existing Rs 2,000 saving.
2. Tax relief on House Rent Allowance (HRA) hiked from Rs 24,000 per year to Rs 60,000.
The Tears…
1. Pensions and select long-terms savings instruments to be partially taxable. The government has proposed to exempt withdrawal of up 40 per cent of corpus from the pension fund, but at the same time has proposed to introduce tax from similar savings funds like EPF (Employee Provident Fund) and NPS (National Pension Schemes) which were totally tax-free till now.
2. Cars & Cigarettes to cost more – Taxes on Tobacco and related products are a commong thing in the Budget, so this year too, the Finance minister has proposed to hike tax on tobacco by 10-15 per cent, except beedis. Jaitley has also announced additional 1 per cent tax on luxury cars costing over Rs 10 lakh, and 2 per cent infrastructure cess on small petrol cars, and 2.5 per cent cess on diesel cars. Jaitley said that the move is in order to curb pollution, and has proposed to allow private players to provide public transport services via buses.
3. Krishi Kalyan Tax (KKT) a levy of 0.5 per cent introduced, on all taxable goods and services above Rs 200,00 in cash, from 1 June 2016 in order to benefit the farmers.
