Budget 2020: New I-T plan to benefit those who avoid deduction, exemption

Written by Sandeep Singh | New Delhi | Updated: February 2, 2020 4:37:32 am Post the announcement of Budget proposals, Dahiwal felt that the new tax plan may be beneficial for him as the tax rates announced by the Finance Minister were significantly...

Budget 2020: New I-T plan to benefit those who avoid deduction, exemption
Written by Sandeep Singh | New Delhi | Updated: February 2, 2020 4:37:32 am
Budget 2020, union budget 2020, Nirmala sitharaman, tax exemption, new tax slabs, indian express news Post the announcement of Budget proposals, Dahiwal felt that the new tax plan may be beneficial for him as the tax rates announced by the Finance Minister were significantly lower.

Sarang Vilas Dahiwal, a government contractor in Pimpri, Pune, is the sole earner in a family of six. While his income in a year ranges between Rs 15 lakh to Rs 20 lakh, the introduction of the new tax plan — announced in the Union Budget on Saturday — has forced him to think on whether he should continue with the existing tax plan or opt for the new one.

While Dahiwal said he expected that the government should reward honest taxpayers, he added that he is upset about the fact that there has been no change in the existing tax plan.

Dahiwal has a home loan where he claims tax benefit on interest outgo of Rs 2 lakh. He also has a health insurance for his family, for which he pays a premium of around Rs 25,000 and claims tax benefit under Section 80C by investing in life insurance scheme and investing in public provident fund.

In aggregate, as of now, he claims deductions and exemptions on an aggregate amount of Rs 3.75 lakh and, thereby, saves taxes to the tune of Rs 1,17,000.

Under the new tax plan, Dahiwal will have to forego all the exemptions and deductions he currently claims. As a result, he will end up paying a total tax of Rs 195,000 as against the current tax outgo of Rs 1,56,000.

Post the announcement of Budget proposals, Dahiwal felt that the new tax plan may be beneficial for him as the tax rates announced by the Finance Minister were significantly lower.

He, however, said that he would seek the advice of his chartered accountant before he opts for the new tax plan proposed by the Finance Minister.

Dahiwal added he feels that the government should have increased the tax benefit on home loan interest payment as that would have reduced his tax outgo and left something extra for him to spend.

With Inputs from Partha Sarathi Biswas

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