Zee Media Bureau
New Delhi: Come April and you will see some changes in personal finances as you will be entering a new fiscal year (2016-17) and hence new budgetary provisions will govern you. Apart from that the government has introduced some other changes to the interest rates of savings schemes which may affect you positively or negatively.
Here are the major changes listed below:
1. Employer contribution to PF has been restricted to Rs1.5 lakh, no tax on PF withdrawal as proposed in the budget earlier.
2. Revised interest rates on small saving schemes
Interest rate on Kisan Vikas Patra has also been slashed to 7.8 percent from 8.7 percent.
The interest rate on one-year time post office deposit has been cut to 7.1 percent from 8.4 percent
The rate on two-year time post office deposit has also been slashed to 7.2 percent from 8.4 percent.
Interest rate on three -year time post office deposit ha been cut to 7.4 percent from 8.4 percent.
The rate on 5-year time post office deposit is cut to 7.9 percent from 8.5 percent.
The rate cut on 5-year national saving certificates is 8.1 percent.
Interest rate on 5-year senior citizen scheme interest rate has been slashed to 8.6 percent from 9.3 percent.
Interest rate on girl child scheme has been slashed to to 8.6 percent from 9.2 percent.
The interest rate on postal savings deposits, though, has remain unchanged at 4 percent.
3.Additional tax at the rate of 10 percent of gross amount of dividend will be payable by the recipients receiving dividend in excess of Rs10 lakh per annum
4. Surcharge to be raised from 12 percent to 15 percent on persons, other than companies, firms and cooperative societies having income above Rs1 crore.
5.Deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs50 lakh
6.Increase in time period to five years from three years for acquisition or construction of self-occupied house property for claiming deduction of interest u/s 24
7.Government will pay contribution of 8.33 percent for of all new employees enrolling in EPFO for the first three years of their employment
8.Krishi Kalyan Cess, @ 0.5 percent on all taxable services, w.e.f. 1 June 2016
9.Infrastructure cess, of 1 percent on small petrol, LPG, CNG cars, 2.5 percent on diesel cars of certain capacity and 4 percent on other higher engine capacity vehicles and SUVs
10.Excise duties on various tobacco products other than beedi raised by about 10 to 15 percent.
11.Any redemption of Sovereign Gold Bond, by an individual shall not be treated as transfer and therefore shall be exempt from tax on capital gains.
12.Extension of tax provision provided in case of mutual fund plan mergers. Any transfer by a unit holder in to the consolidated scheme of the mutual fund is not chargeable to tax.
13.The limit of deduction of rent paid under section 80GG has been increased from Rs24,000 per annum to Rs60,000, to provide relief to those who live in rented houses.
14.Interest on Deposit Certificates issued under the Gold Monetisation Scheme, shall be exempt from income-tax
15.The ceiling of tax rebate under section 87A has been raised from Rs2,000 to Rs5,000 to lessen tax burden on individuals with income up to Rs5 lakh