The union budget 2016 has considerable offerings for employees. It has several offerings for the employees and new workers in particular. Here are some important points for employees from Union Budget 2016:
Revised tax relief: This budget increased the tax relief for middle class tax payers by raising the ceiling of tax rebate U/s. 87A from Rs 2,000 to Rs 5,000. This will benefit the salaried employees with income up to Rs 5 lakh will get a relief of Rs 3,000 in their tax liability. It will initiate to hire unemployed people for the suitable positions.
PF for new employees: The government announced that it will pay employers’ share of 8.33 per cent in the Employee Provident Fund (EPF) for all new employees for first three years. The policy is applicable to the all employees having salary of Rs 15000. The government allocated Rs 1000 crore aside for this new EPF scheme.
Home loan interest waive: The budget 2016 mentioned that first time home buyers will get additional Rs 50,000 deduction for houses costing up to Rs 50 lakh and a loan of up to Rs 35 lakh. It will encourage more young professionals to invest in housing in the early stages of life.
Saving schemes simplified: The government has proposed to make withdrawal of up to 40 per cent of the corpus at the time of retirement tax exempt in the case of National Pension Scheme (NPS). In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40 per cent of corpus to be tax free will apply in respect of corpus created out of contributions made after 1.4.2016.
HRA: The budget 2016 has increased the HRA deduction amount from Rs 24,000 per annum to Rs 60,000 per annum. It will give less taxable income to the employees.