Interim Budget – Highlights !
1. Full tax rebate for individuals earning up to Rs.5 lakh.
Tax savings largely for people earning about 5-10L annually.
Minimal impact for people in the higher tax slabs or earning say 15L+ etc. They still save about 3K annual for the savings on tax on 10K  increase in standard deduction
Tax Calculations with Provisions (Example of 10L+ Income and how it can go tax free.. Now)
Total Salary: 10.25 lacs *
Deductions
Housing Loan Interest 200k
Standard Deduction 50k
Sec 80C 150k
NPS 50k
Mediclaim Self 25k
Mediclaim Parents 50k*
Total Deduction 525k
Net Income 5 lac
Tax 12.5k
Rebate 12.5k
Net tax to pay ZERO
*80G and other deductions (as applicable) not taken into effect
*The above deductions are taken as example as majority of salaried people avail the same
2. TDS relief: There will be no TDS on interest earned up to Rs.40000 from savings bank account and post office savings schemes.Also, there will be no TDS on rental income of up to Rs.2.40 lakh per annum.
3. Higher standard deduction limit: Salaried individuals can claim standard deduction of up to Rs.50,000 (up from Rs.40,000) in lieu of transport and medical reimbursement.
4. Higher tax free gratuity: A good news for private sector employees. The government has proposed to double the approved ceiling limit for gratuity payouts from Rs 10 lakh to Rs 20 lakh. That means, gratuity of up to Rs.20 will not be taxable anymore.
5. No income tax on notional rent: So far, if an individual owned a second house, even if his house is vacant, he had to pay income tax on notional rent (i.e. market value of rent of the property in a particular location). However, individuals having unoccupied second house will not be required to pay tax on such a property.
6. Amending Section 54EC: Individuals can invest up to Rs.2 crore in two residential properties under Section 54 EC. At present, Section 54EC of the Income Tax Act lists the cases in which capital gains tax from long- term assets (held for more than three years) need not be charged if the gains are up to Rs. 1 crore and are invested in certain specified areas.
Points 5/6 are trying to give a boost to the sagging real estate market by introducing incentives for home purchases. I don’t think salaried people will start buying just yet considering that the prices in cities like Mumbai are still sky high. However it is good proposal for people with 2 houses or in the mode of selling etc.
Some interesting statistics
6.85 crore individuals have filed income tax returns last fiscal
The government has collected close to Rs.12 lakh crore from direct tax