While the media is rife on analyses and discussions on the performance of the Narendra Modi-led NDA government, the tax payers got some tax concession in the form of enhanced deductions and exemptions. The extra concessions are supposed to put more money in the pocket of the tax payer and help him save better for a better future.

Hike in basic exemption limit

While ordinary citizens got their basic exemption limit hiked to Rs. 2.5 lakh from Rs. 2 lakh, and for senior citizens to Rs. 3 lakh from Rs. 2.5 lakh. This means the government will allow Rs. 20,000 as monthly living costs of a household, on average, and impose taxes only at income upwards that. But inflation has made living costs, especially in urban areas, go beyond this limit.

Hike in home loan deduction limit

In 1999, the government had set the limit of Rs. 1.5 lakh on interest on loans for self-occupied houses. Considering that property prices have increased substantially over the years, the government revised this exemption to Rs. 2 lakh this year. This is especially helpful to people who aspire to acquire a new property of their own.

Hike in 80C deductions

Deductions on insurance premia, interest rate principal on homeloan, and contributions to EPF and PPF has also been hiked. This has been raised from Rs. 1 lakh to Rs. 1.5 lakh in last budget. There is also an additional deduction of Rs. 50,000 that can be claimed under National Pension Scheme (NPS).

Hike in deductions for health insurance and medical treatment

For people who have some ailment or have dependents suffer from ailments, the deductions for Rs.30,000 for treatment costs of senior citizens who do not have any health insurance will come handy. The government is also looking to improve insurance coverage by increasing the limit of deductions on health insurance premium for individuals from Rs 15,000 to Rs. 25,000 and for senior citizens from Rs. 20,000 to Rs. 30,000.

Hike in conveyance allowance

While fuel and commuting costs have gone up several times, all that the Indian salaried tax payer was entitled to claim under conveyance allowance was Rs. 800. With this being revised to Rs. 1,600 in this budget will provide some relief to tax payers.

These tax concessions are supposed to help various taxpayers and put more cash in their pocket. This is one positive development that the government has implemented over the last one year, and the Indian taxpayer should feel happy about it. While inflation might have grown by leaps and bounds in the past year, these steps are a small solace for the Indian tax paying class.

Author's Bio: 

Sanjit Agarwal is a Financial Adviser by profession with an experience of around eight years in Personal Finance. As a Financial Writer, he has penned various write-ups on Insurance, Investments, Money Management, Retirement Planning, Savings, Tax, etc.