Giving relief to middle class tax payers and promoting health insurance, the Union Budget today proposed an increased tax deduction limit of up to Rs 25,000 besides giving additional pension benefits and doubling limit under transport allowance.
Health insurance premiums up to Rs 25,000 will be subject to tax deductions, from Rs 15,000 earlier. For senior citizens the limit is increased to Rs 30,000 from Rs 20,000.
For very senior citizens of 80 years or more, who are not covered by health insurance, government said deduction of Rs 30,000 will be given for treatment expenses.
Deductions under expenditure towards specified diseases of serious nature are proposed to be enhanced by Rs 20,000 to Rs 80,000 for very senior citizens, Jaitley said while presenting Union Budget 2015-16 in Parliament.
“The fifth pillar of my taxation proposals this year is extension of benefits to middle class tax payers,” Jaitley said.
And an additional deduction of Rs 25,000 will be allowed for differently-abled persons.
“With regard to general insurance sector, government has clearly acknowledged critical role that this industry can play in nation’s inclusive growth agenda by introducing schemes in the area of personal accident insurance and enhancing exemption limit on health insurance,” said Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance.
Among others, the Finance Minister has also proposed to increase tax deduction limit towards contribution in a Pension Fund and New Pension Scheme from Rs 1 lakh to Rs 1.5 lakh.
For senior citizens, service tax exemption will be under Varishta Bima Yojana, Jaitley added.
On social safety, government has proposed an additional deduction of Rs 50,000 for contribution to the New Pension Scheme under Section 80CCD.
“This will enable India to become a pensioned society instead of a pensionless society,” Jaitley said.
Investment under Sukanya Samriddhi Scheme to promote girl chid already attracts tax deductions, Jaitley has further proposed that payments to the beneficiaries including interest on such deposit will also be fully exempt.
Among others, government has doubled the exemption limit under transport allowance to Rs 1,600 per month.