Budget 2017 & Outline Of Its Impact On Tax Saving,Mutual Funds ,Real Estate & NPS

Budget 2017 and its impact on personal Tax Saving,Mutual funds,Real Estate & NPS

Changes proposed in personal income tax slab:

1. Tax rate for individuals having income in the range of Rs.2.50,000 to 3,00,000 reduced from 10% to 5%.
2. Rebate of Rs.5000 u/s 87A have reduced up to Rs.2500/-.This rebate will now available if taxable income is upto Rs.3,50,000.
3. 10% Surcharge if annual taxable income is in between 50 L and 1 Crore.
4. No change in surcharge of 15% on taxable income above Rs.1 Crore.

Changes proposed in Mutual funds:

No major changes have proposed for mutual funds except:

1. RGESS – Rajiv Gandhi Equity Saving Scheme which was available for first time equity investors will be phased out.
2. Provisions of LTCG -Long Term Capital Gains for equity remains as it is.

Changes proposed in NPS:

1. Budget 2017 proposes tax exemption for partial withdrawal (up to 25% of contribution)  made in specific cases.

Budget 2017 and its effect on Real Estate:

1. LTCG has been tweaked for real estate.Holding period reduced up to 02 years from earlier 03 years to be eligible for long term capital gains.
2. Individuals and HUFs paying rent of more than Rs.50,000 will need to deduct 5% tax at source.It can be done once in a year (from rent for last month of financial year).