Investment Benefits :
Additional deduction for contribution to National Pension Scheme.In order to encourage people to contribute towards National Pension Scheme, an additional deduction up-to INR 50,000 will be available on the employee’s contribution. This is in addition to the deduction available upto10% of salary within an overall limit of INR 150,000.
Investment in Life Insurance Corporation (‘LIC’ Annuity Plan / any other Pension Fund The limit of eligible deduction for investment in LIC Annuity Plan or any other Pension Fund is proposed to be increased to INR 150,000 from the existing INR 100,000
Contributions for the benefit of girl child -Contributions/ investments made by an individual in the name of girl child to notified securities/schemes will be eligible for deduction under section 80C. Interest earned on Sukanya Samriddhi account will also be exempt.
Transport allowance exemption increased:
For salaried individuals, exemption on account of transport allowance is proposed to be doubled to INR 1,600 per month from the existing limit of INR 800 per month
Relief with respect to medical treatment , etc.
Health insurance premium/Health check-up/Medical expenditure The existing deduction available for payment towards health insurance premium and preventive health checkup has been enhanced by INR 10,000 as under:
15,000 for individual, spouse and dependent children INR 20,000 for senior citizens, including payment for parents
Proposed limits, INR 25,000 for individuals, spouse and dependent children,INR 30,000 for senior citizens, including payment for parents It is proposed that medical expenditure incurred for very senior citizens (80 years and above will be deductible up to INR 30,000 if no payment has been made towards any existing health insurance policy for such individuals. Relief for persons with disability Deduction available to a person/dependent with disability has been enhanced from INR 50,000 to INR 75,000. In case of a person/ dependent with severe disability, the limit has been increased from INR 100,000 to INR 125,000.
Medical treatment of specified diseases: Under the existing provisions, a certificate is required from a specialist doctor in a Government hospital for claiming deduction for expenditure incurred for medical treatment of specified diseases. It is now proposed that it will suffice if a prescription is obtained from a specialist doctor (not necessarily from a Government hospital for this purpose. In addition, the limit in case of very senior citizens (80 years or above is proposed to be increased to INR 80,000 from INR 60,000.
Proposals for Tax Deduction at Source
Withholding tax on salary payments :Under the existing provisions, while determining withholding tax on salary, the employer is authorized to allow certain deductions, exemptions, or set off of certain losses, etc. after obtaining necessary evidence/documentary proof from the employees. For example, house rent allowance, interest payment for claiming loss from self occupied house property, etc. However, the existing provisions do not contain any
specific guidance regarding the nature of evidence / documents to be obtained from the employees in this regard thereby resulting in lack of uniformity.To bring clarity, it is proposed to amend the provisions to provide that the employer shall obtain from the employees evidence / documentary proof in such form and manner as may be prescribed by the CBDT in due course
Withholding tax on provident fund withdrawals :Tax deduction at source on withdrawal of accumulated balance has been simplified. It is proposed that in case of premature withdrawals of INR 30,000 or more, where employers manage their own private provident fund trust, tax will be withheld @10%. If PAN is not furnished by the employee, tax will be withheld at maximum marginal rate. The amendment is proposed to be effective from June 1, 2015.
Relief from withholding tax on payments from LIC It is proposed that individuals not having taxable income and receiving payments under LIC upto INR 100,000 can claim relief of non- deduction of tax at source by submitting Form 15G / 15H