Monday, February 29, 2016

Budget 2016 Tax slab remains same

Few Things to note in this budget.

Tax slabs remain the same. They’re still at

  • Less than 2.5 lakh: no tax
  • 2.5L to 5L: 10%
  • 5L to 10L: 20%
  • >10L: 30%
If your income is less than 5L, you got a rebate of Rs. 2000 thats now increased to Rs.5000 (you had to pay that much less). 
Dividends received from listed companies was not taxed in the hands of the shareholders (Individuals/ HUF/ Resident of India). The company paid dividend distribution taxes before dividend was paid out. 
 Effective 1 April, 2016 any dividend income (from equities or bonds) received by an individual or a HUF in excess of Rs. 10 lakhs shall be taxed at a rate of 10%. This is only limited if the dividend income is greater than 10 lakhs in a year. However first Ten lakh of dividend is still tax free.
It also applies to mutual fund dividend payouts and private company dividends. 
This shall be applicable from the 1 April, 2016 which means that the dividends declared before 31 March, 2016 would not be taxable.
The big blow to everybody is the Service tax being raised from 14.5% to 15% on all services. It sounds so small but it pinched you an all the services.