Page 36 - Seniors Today Febuary 2020
P. 36
Money
What
does the
Budget
mean?
Anil Harish examines the various components of the Union Budget, and the
implications for us
Every year the Finance Minister of India upto Rs. 15 lakh has been provided for in
presents the Union Budget to Parliament. the Finance Bill. At present, an individual
This consists of several components. One is or an HUF can avail of certain deductions
the budgetary allocation for the Ministries such as for investment into Public
and the various activities and schemes and Provident Fund or Life Insurance Policy or
another aspect is the manner of collection Medical Insurance or interest payable on
of revenue to meet the expenditure of the purchase of a house etc. These deductions
Government. One of the components of bring the taxable income down and thereby
revenue collection is from Direct taxes, reduce tax.
primarily, the Income-tax Act, 1961. However, a new system is now being
Every year, therefore, we see a large number proposed, but this will be an option. Under
of amendments being made to the Income- this new system, a person can opt not to
tax Act. In this year’s Finance Bill, the claim these various deductions and pay tax
number of amendments proposed to be at a reduced rate on the first Rs. 15 lakh.
made to the Income-tax Act, is as many as This can help some persons, particularly
103. those who are not claiming deductions on
It is said that nothing is as certain as account of PPF etc. The maximum benefit
death and taxes! Therefore, we need to that can be derived from this new optional
understand how some of these amendments tax regime is Rs. 78,000/- per year.
affect us. If a person does not have business income,
then one can change the option from year to
Optional method of taxation year.
An optional method of taxation of income If, however, one does have business
36
