MeasureMonetising GoldThe government has introduced a gold monetisation scheme that will allow investors in gold deposit schemes and gold loan schemes to earn interest. The government is also trying to structure a sovereign gold bond that could act as an alternative to physical gold
ImpactPeople with idle gold/jewellery will now be able to earn interest on their holdings. While the modalities of this scheme are not clear, investment managers expect the government to pay out a fixed coupon on physical gold kept with the government
MeasureTransport AllowanceTransportation allowance exemption raised from Rs 800 to Rs 1,600 a month
ImpactTotal annual benefit will go up from Rs 9,600 to Rs 19,200. This sum is tax-exempt as it is considered an out-of-pocket expenditure
MeasureDeclare Overseas AssetsConcealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with punishment of rigorous imprisonment up to 10 years. Beneficial owner or beneficiary of foreign assets will be mandatorily required to file returns, even if there is no taxable income
ImpactIndians with assets in foreign countries will have to declare the nature of assets (and gains from it) every time they file tax returns in India. Non-filing of returns or filing of returns with inadequate disclosure of foreign assets will be liable for prosecution
MeasureDonations To Swach Bharat/ Ganga clean-upDonations made to Swachch Bharat Kosh (by both resident and non-resident Indians) and Clean Ganga Fund (by residents) shall be eligible for 100 per cent deduction under Section 80G of the Income Tax Act
ImpactDonations to Swachchh Bharat Kosh and Clean Ganga Fund can be deducted 100 per cent from taxable income. This route could get popular among people who are conscious of the need to preserve the environment
MeasureNew Pension SchemeThe limit on deduction on account of contribution to New Pension Scheme (NPS) (under Section 80CCD) has been increased from Rs 1 lakh to Rs 1.5 lakh. Also, formal sector workers have been given the option to choose between Employee Provident Fund and NPS
ImpactThe move will popularise NPS. NPS fund managers charge just about 0.25 per cent of assets managed as asset management fees
MeasureWealth Tax Out, Additional Surcharge InThe government has decided to abolish wealth tax and replace it with an additional surcharge of 2 per cent on the super rich with a taxable income of over Rs 1 crore
ImpactTaxpayers with taxable income exceeding Rs 1 crore will have to shell out more due to increase in surcharge from 10 to 12 per cent. Scrapping of wealth tax will mean a marginally higher burden on the rich. This move is intended to curb black money
MeasureHealth Insurance ChoiceEmployees can choose between Employees State Insurance health cover or a health insurance scheme recognised by IRDA
ImpactThis can bring down the cost of private health insurance over a longer term. The move could also bring down the incidence of ‘under-insurance’. “Fungibility between ESIC and health insurance is a great idea,” says Sumit Shukla of HDFC Pension
MeasureDeducation Of Health Insurance PremiumTax deduction (under Section 80D) for health premiums paid is raised from Rs 15,000 to Rs 25,000 and from Rs 20,000 to Rs 30,000 in the case of senior citizens
ImpactThis will encourage people to take / increase health insurance cover. It may also increase the penetration of health insurance products in the country
MeasureInfrastructure BondsThe government intends to permit tax-free infrastructure bonds for projects in the rail, road and irrigation sectors
ImpactInfrastructure bonds are good for long-term investment as interest earned is tax free. Coupon rates on infra bonds range between 8-9 per cent vis-à-vis pre-tax yields of 12-12.5 per cent among rated securities
You can claim an exemption of Rs 50,000 under Section 80CCD for contributions to the National Pension Scheme
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