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7 budget items affecting your personal taxation

Oh the hype of it all...after much song and dance all we got was the following. Not sure all the expectations that had been built up have been met, but for better or for worse, here are the changes that will have some impact on your personal taxation going forward.

1. Marginal Increase in Tax Exemption
2. Higher Deduction under Section 80DD
3. Expanded Scope of Section 80E
4. Elimination of Surcharge
5. Abolishment of Fringe Benefit Tax (FBT)
6. Increase in Wealth Tax Exemption
7. Automation of Tax Filing Procedure

1. Marginal Increase in Tax Exemption: Personal income tax exemption limit raised for senior citizens by Rs 15,000 and for all others by Rs 10,000.
2. Higher Deduction under Section 80DD: Annual deduction in respect of maintenance, including medical treatment, for a dependent with severe disability (more than 80%) has been raised to Rs 1 lakh from the current Rs 75,000.
3. Expanded Scope of Section 80E: Annual deduction in respect of interest on loans taken for higher education purposes has been expanded from the current limited list of courses to cover all fields of studies, including vocational studies, pursued after completion of schooling.
4. Elimination of Surcharge: The 10% surcharge on taxes for those earning annual income above Rs 10 lakhs will no longer exist. This will lead to a tax saving for higher income earners
5. Abolishment of Fringe Benefit Tax (FBT): FBT on the value of fringe benefits provided by employers to employees has been abolished. Reimbursements will be taxed as perquisites at the marginal tax rate. This might increase the tax burden on employees.
6. Increase in Wealth Tax Exemption: The exemption limit for wealth tax has been increased from Rs 15 lakhs to Rs 30 lakhs.
7. Automation of Tax Filing Procedure: Reiteration of the re-engineering of the key business processes around the filing of direct taxes. Expect simplified tax filing in the near future, with the prospect of quicker refunds.

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