The Budget 2014 seems
to be promising for the all taxpayers allowing them to save more taxes
on income. There has been increase in the limit of certain exemptions
which will further reduce the tax burden of the individuals who can
avail the benefit. A proper planning can help you lower your taxable
income by Rs. 1.5 Lakhs to save greater amount of taxes depending on the
tax slab of the individual. An Individual under higher slab will save
more than the individual falling at lower tax slab.
Tax Slab increased to Rs. 2.5 Lakhs for normal citizen and Rs. 3 Lakhs
for senior citizen
Income earned by an individual is chargeable to tax as per the slab they
fall in. Individuals below the age of 60, exemption limit was
previously Rs. 2 Lakhs which has been increased to Rs. 2.5 Lakhs.
Resident Senior citizen exemption limit has been increased from Rs. 2.5
Lakhs to Rs. 3 Lakhs. This will increase the take home pay of small
taxpayers.
Now, Individuals can now let go their tax worry if they are earning
below Rs. 2.5 Lakhs. This hike in the tax slab will help save a maximum
of Rs. 5000 of taxes for every individual having taxable income above
Rs. 2 Lakhs. This benefit of upto Rs. 2.5 lakhs can be availed by
Non-Residents as well.
80C Investment limit hiked to Rs. 1.5 Lakhs
The investment in 80C provides a list of tax saving investments.
Individuals can invest in the listed investments like PPF, LIC, Housing
Loan Principal Re-payment, Tuition Fees, FD, MF, etc. Previously
individuals found this limit very small as they invested more but got
benefit only upto Rs. 1 Lakh. Increase in the limit has given some
relaxation to individuals who have investment more than Rs. 1 Lakh in
such investment. Rightful Investment can now reduce the tax liability of
Individuals by a maximum of Rs. 50000. An individual falling under a
greater tax slab can save upto Rs. 15000 of his pay from being deducted
as taxes.
Invest in PPF upto 1.5 Lakhs to get tax benefit
People invest in PPF as it is the most efficient tax saving investment
as it gives 3 benefits at a time. The investment can be claimed under
80C to save taxes. Further, interest income is also exempt from tax and
the income received on maturity is also tax free. The PPF investment
limit was previously Rs. 1 Lakh which has now been raised to Rs. 1.5
Lakhs. This will allow Individuals to invest more in PPF each year and
save more taxes. Further, with the increase in the limit of 80C from Rs.
1 Lakh to 1.5 Lakhs, Individuals can get additional investment benefit
also each year and reduce their taxable income by a maximum of Rs. 50000
each year. This will help them to save a maximum of Rs. 15000 of taxes
depending on the tax slab of the individuals.
Save more on Housing Loan
The Govt. has been encouraging Individuals to invest more on House
Property. They have been giving greater benefits on Housing Loan by
exempting payment of interest as well as principal part of the loan.
Budget 2013 introduced a new section 80EE giving additional benefits of
Rs. 1 Lakh on interest payment to Individuals who were taking housing
loan for the first time. The section had certain conditions which were
mandatory to avail the benefit. Many failed to take the benefit of
section 80EE.The Budget 2014 has simply increased the exemption limit of
Rs. 1.5 Lakhs u/s 24(b) to Rs. 2 Lakhs against payment of interest for a
self occupied property.
The repayment of housing loan is also exempt from taxes upto Rs. 1 Lakh
under 80C. The Budget 2014 has also increased the limit of 80C allowing
individuals to claim more exemption and save taxes. This will only
benefit individuals who have not used up their 80C limit for some other
investment. The Budget 2014 can help individuals to claim an additional
benefit of Rs. 1 Lakh against housing loan for both interest and
principal component. This will save the tax liability by Rs. 10000 which
can be a great relief to the taxpayers.
The individuals can save a maximum of Rs. 30000 of taxes depending on
the slab of the individuals. The individuals falling under the slab of
30% can reduce their taxable income by maximum of Rs. 100000 and save
huge taxes.
To Conclude: The small and marginal taxpayers are to be benefited with
the amendments brought in by Budget 2014 but Individuals at a higher
slab can save greater taxes. The increase in the exemption limit of
different section has given the opportunity of availing more tax
exemptions with proper planning. Individuals should invest more in PPF
and avail housing loan benefits if they are planning to invest in a new
property as these options will help them reduce tax liability to a great
extent. Individuals should start planning for the FY 14-15 to invest
smartly and reduce their income tax liability to save more taxes.
Read more at: http://www.moneycontrol.com/news/tax/how-will-budget-2014-impact-you_1127771.html?utm_source=ref_article
Read more at: http://www.moneycontrol.com/news/tax/how-will-budget-2014-impact-you_1127771.html?utm_source=ref_article
