No hike in standard deduction or exemptions or new investment avenues; the finance minister play it safe
28-Feb-2015 •Madhu T
If you want to save more on taxes, take a look at your health insurance cover and retirement savings. The finance minister has increased the income tax deduction available on health insurance premium under Section 80D to ₹25,000 from ₹15,000. Senior citizens can now claim tax deduction of up to ₹30,000 as compared to ₹20,000 earlier. They can also deduct an equivalent amount if they are not eligible to buy a health insurance cover, the finance minister said in his speech. Very senior citizens, those above 80, can claim tax deduction on medical expenses of up to ₹80,000 incurred on treating specified diseases under Section 80DDB. The earlier exemption limit under the section was ₹60,000.
The finance minister also hiked the tax exemption available on contributions to the pension funds of Life Insurance Corporation of India (LIC) or the ones approved by Insurance Regulatory and Development Authority of India (IRDAI), available under Section 80CCC, to ₹1.5 lakh from ₹1 lakh. The tax deduction available on contributions to the National Pension Scheme (NPS) has also been increased to ₹1.5 lakh from ₹1 lakh. The finance minister has also proposed an additional deduction of up to ₹50,000 over and above the limit of ₹1.5 lakh for contributions to the NPS.
The finance minister has also abolished the wealth tax and increased the income tax surcharge on the super rich by 2 per cent.