How Union Budget 2016 can affect you?

On 29th February 2016 Morning, when the world was waking up to the leap year, India was preparing for its Union Budget 2016, which is definitely going to change the way we spend our hard earned money.

Why do you think LED bulbs get cheaper every year and Expensive Cars with LED bulbs get costlier ? This is because Government wants you to consume lesser electricity and turn its loss making electric plants into profit once and similarly they want people buying expensive cars to pay more taxes in order to pay for the development of more new roads. Thus the entire budget is framed as such to meet the demands of the country every year by the Financial Minister of India.

This year's budget is more concerned with macroeconomic stability and driving growth through domestic demand and thus Finance Minister Arun Jaitley has focused more towards reforms that will boost economic opportunity on the domestic side.

Here are the personal financial highlights of the Union Budget 2016 that will affect you in the coming financial year :

1. Income tax relief for small taxpayers, more taxes for super-rich: Those earnings less than Rs. 5 lakh per annum will get additional relief of Rs. 3,000 on income tax, but the surcharge on super-rich (income of over Rs. 1 crore) has been hiked from 12 per cent to 15 per cent.
2. Senior citizens will get additional healthcare cover of Rs 30,000 under the new healthcare scheme.
3. Infrastructure and agriculture cess to be levied.
4. Excise duty raised from 10 to 15 per cent on tobacco products other than beedis.
5. 1 per cent service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.
6. SUVs, Luxury cars to be more expensive. 4% high capacity tax for SUVs.
7. Companies with revenue less than Rs 5 crore to be taxed at 29% plus surcharge.
8. Limited tax compliance window from Jun 1 - Sep 30 for declaring undisclosed income at 45% incl. surcharge and penalties
9. Excise 1 per cent imposed on articles of jewellery, excluding silver.
10. 0.5 per cent Krishi Kalyan Cess to be levied on all services.
11. Pollution cess of 1 per cent on small petrol, LPG and CNG cars; 2.5 per cent on diesel cars of certain specifications; 4 per cent on higher-end models.
12. A new health protection scheme for health cover upto 1 lakh per family.
13. Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses.
14. Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.
15. Service tax exempted for housing construction of houses less than 60 sq. m.
16. 15 per cent surcharge on income above Rs. 1 crore.
17. Presumptive taxation scheme introduced for all professionals with receipts up to Rs. 50 lakhs.
18. Proposes to levy infrastructure cess of 1-4 per cent which will make cars costlier. Cigarettes will cost more on 10-15 per cent excise duty hike. A "Krishi Kalyan" cess of 0.5 per cent has been proposed on all services effective June 1, 2016. This will make most of services (such as eating out, buying property, etc.) more expensive.
19. TDS on purchase of asset over Rs. 2 Lakh in case and luxury cars.
20. Reforms in FDI policy in the areas of Insurance and Pension, Asset Reconstruction Companies, Stock Exchanges.
21. General Insurance Companies owned by the Government to be listed in the stock exchanges.
22. 100% FDI to be allowed through FIPB route in marketing of food products produced and manufactured in India.
23. Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS). Annuity fund which goes to legal heir will not be taxable.
24. Reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.
25. Rs 1,000 crore allocated for new EPF (Employees' Provident Fund) scheme.
26. Govt. will pay EPF contribution of 8.33% for all new employees for first three years.
27. Dividend in excess of Rs. 10 lakh per annum to be taxed at additional 10 per cent.