INDIA UNINTERRUPTED

H I N D U STAN T I M ES , T U ES DAY, M A R C H 0 1 , 2 0 1 6

PROPOSALS
AND THEIR
IMPACT

From the personal finance

perspective, while there were no
substantial changes in the
individual tax slabs, individuals
stand to gain through several
budget proposals, finds FPSB
India Knowledge Team
PROPOSALS

IMPACTS

TOP FIVE
BILLIONAIRES
How the wealth of the
richest Indians changed on
the Budget day, when the
BSE Sensex fell almost 1%

SAVINGS & CASH FLOWS

Relief under
section
80GG etc.

39,000

For individual tax payers with income up to

`5,00,000, rebate has been raised to `5,000.
Section 80GG seeks to benefit the self-employed
who do not get HRA with a rebate of `60,000

Mukesh Ambani,
Chairman, RIL

1.46

The net impact of these two

proposals to the budget is expected
to put cash quivalent to `39,000 in the
hands of eligible people.

lakh crore

On Friday `1.44 L cr

LONG-TERM OBJECTIVES

50,000

Additional
deduction for
first-time
home buyers

1.66%
Dilip Shanghvi,

This will benefit home buyers for the

additional exemption even if a loan of
`25 lakh is availed at 10% p.a. interest for
15 to 20 years. This could prove to be an
incentive for first-time home buyers

For first time buyers of house

property the budget has provided
for an additional deduction of interest
of `50,000 where the value of the
house is under `35 lakh.

MD, Sun Pharma

1.17

`lakh crore
On Friday
`1.19 L cr

Also, in yet more relief for

senior citizens 40% of the
corpus withdrawal from NPS
shall be tax free.

This implies an incremental saving of tax

as prevalent rules provided for 33.33% of
withdrawal corpus as tax free. This is another
good reason for investing in NPS.

-1.84%

INVESTMENTS

10

Azim Premji,

Additional dividend
tax on dividend over
`10 lakh per annum

Chairman, Wipro

0.89

`
This will lead to a
lower return from
investments.

-2.25%

The incentives will make

the scheme more attractive
and popular for all investors
looking to invest in this asset
class for a medium to long term
period of 5 to 7 years.

Redemption by an individual Sovereign Gold

Bond under the Sovereign Gold Bond Scheme
2015 shall not be charged to capital gains tax.
Further. long term capital gains arising on transfer
of Sovereign Gold Bond would be eligible for
indexation benefits.

KM Birla,
Chairman, Aditya Birla Group

0.85

RISK MANAGEMENT & INSURANCE

` lakh

lakh crore

Insurance cover
under the Health
Protection Scheme

The budget has provided for a health

cover of `1,00,000 per year (`30,000
additional for Senior Citizens) under the
Health Protection Scheme.

lakh crore

On Friday `0.91 L cr

Dividend Distribution Tax for those earning dividend in

excess of `10 lakh per annum will be required to pay
additional dividend tax of 10%.

On Friday `0.85 L cr

-0.4%

This measure will benefit senior citizens

more as they have to pay a premium for
seeking health cover and the measure gets
translated into cash savings for them.

Shiv Nadar,
Chairman, HCL

0.69

SPENDING AND EXPENSES

15

Surcharge on individuals
with income above `1 crore
against the previous 12%

lakh crore

On Friday `0.7 L cr

Surcharge on individual assessees with income above `1 crore

to be raised to 15% from 12%; Tax collection at source at the rate
of 1% while purchasing luxury cars which are priced above `10 lakhs
and on goods and services above `2 lakhs; STT on Options to be
increased to 0.05% from 0.017%; Infrastructure cess ranging from 1%
to 4% on various capacities of cars etc.

-0.84%
Above
proposals will
lead to increased
expenses for higher
income groups.

CONCLUSION: Though this budget is not big from the perspective of personal nance, different sections can derive commensurate benets as per their situations for example rst time home buyers,
self-employed individuals and entrepreneurs on the positive side.
(By Ranjeet S Mudholkar, VC & CEO, FPSB India)

METHODOLOGY: The wealth has been

calculated on the basis of individual
shareholdings in companies that the
above persons own or have a controlling
stake. The change in share prices of
these companies is reected in the
increase or decrease in their wealth

TAX EXEMPTION
NET
WORKING MEN
TAXABLE & WOMEN
INCOME

Existing exemption slab

2,50,000
Proposed exemption slab
UNCHANGED

Existing exemption slab

5,00,000
Proposed exemption slab
UNCHANGED

SENIOR
CITIZENS

in lakh

Tax earlier

3
5
8
10
25
50
100
110
200
300
500

3,090
0
23,690
20,600
87,550
87,550
1,28,750
1,28,750
5,92,250
5,92,250
13,64,750
13,64,750
29,09,750
29,09,750
36,05,000
37,01,563
67,19,720
68,99,713
1,01,80,520
1,04,53,213
1,71,02,120
1,75,60,213

3,090
3,090
0
0
0
0
0

-96,563
-1,79,933
-2,72,693
-4,58,093

Existing income-tax slab: 10% for taxable income between `2.5

lakh and 5 lakh, 20% for taxable income between `5 lakh and
`10 lakh and 30% for liability above `10 lakh. Further, where
total income exceeds one crore rupees, the amount of incometax shall be increased by surcharge @ 12% of tax. Total tax
(including surcharge, if any) is to be further increased by 3% on
account of cess. Calculations take into account section 87A
exemptions

Tax now

Savings

0
0
18,540
15,450
82,400
82,400
1,23,600
1,23,600
5,87,100
5,87,100
13,59,600
13,59,600
29,04,600
29,04,600
35,99,232
36,95,640
67,13,952
68,93,790
1,01,74,752
1,04,47,290
1,70,96,352
1,75,54,290

0
3,090
0
0
0
0
0

-96,408
-1,79,838
-2,72,538
-4,57,938

Increase in tax rebate under Section 87A of the Income

Tax Act, 1961 from `2,000 to `5,000
No change in tax slabs; Rate of surcharge increased by
3% for income above `1 crore i.e. total 15%
The above calculations does not take into account any
proposed changes in Chapter VIA deductions
SOURCE: DELOITTE

Printed and distributed by PressReader

P r e s s R e a d e r. c o m

+1 604 278 4604

ORIGINAL COPY ORIGINAL COPY ORIGINAL COPY ORIGINAL COPY ORIGINAL COPY ORIGINAL COPY

CO PY R I G H T A N D P R OT E C T E D BY A P P L I C A B L E L AW