Deductions and increase in taxes is mixed bag of emotions

Every budget presented by Ministry of Finance under the guidance of Arun Jaitley, is facing mixed reactions from the crowd which was also received by them in different manners. Some people are not happy with it because it is affecting them adversely as compared to others who are finding it favorable and are happy with the same. Numerous major deductions were introduced along with new schemes which all will be affecting the finances of the country in coming years.

Super rich and elite tax payers will be contributing more in the economy by paying the taxes in various forms. It is an outcome of increase in surcharge payable by those citizens who pay more than Rs 1 crore annually in the form of income tax. That is why if somebody is earning more than Rs 10 lakh a month, he/she will have to pay an additional amount of Rs 5,800 every month as his/her income tax.

An additional deduction in income tax has been introduced under section 80CCD which is going to benefit the small and mid income earners. The transport allowance which was tax-free has been doubled which is Rs 1,600 now. The highest tax bracket of 30% has been considered to face the cut down of tax by Rs 2,966 and there will be a cut down of Rs 1,978 in the 20% tax bracket along with deduction of Rs 989 cut in lowest 10% bracket.

The CEO of a health insurance consultancy firm mediamanage.com, Mr. Sudhir Sarnobat called these deductions beneficial for every class, especially individuals in their late 30’s who buys a family floater cover worth Rs 5 lakh-plus which includes their senior citizen parents as well, these people usually pay an annual premium of Rs 45,000-50,000.

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