It means that you could be take home upto an additional ₹ 3,004 a month or ₹36,050 a year
How did we arrive at this figure of ₹ 3,004 a month ?
Changes in the budget 2014-15 the effect the salaried employees.
- Finance minister has raised the income tax exemption limit from 2 lakhs to 2.5 lakhs.For senior citizens it raised from 2.5 lakhs to 3 lakhs for salaried employees.
- The tax exemption on interest on home loans has been raised from 1.5 lakhs to 2 lakhs in the budget 2014-15.
- The tax exemption limit under Income Tax section 80 C has been increased from 1 lakh to 1.5 lakh
- PF contribution limit has also been increased from 1 lakh to 1.5 lakh
What does the changes mean to you as a Salaried employee ?
1. Your yearly take home will increase by 5150/- assuming you yearly salary is more than 2.5 lakhs, which means you get additional ₹ 416.67 per month.
2. You could potentially save on tax between 5,150/- to 15,450/- on the additional 50,000/- on home loan interest.
- 15,450/-(30% tax on 50,000 + education cess ) provided you are on 30% tax bracket with Taxable income above 10 lakhs
- 10,300/-(20% tax on 50,000 + education cess) provided you are on 20% tax bracket with Taxable income above 5 lakhs
- 5,150/-(10% tax on 50,000 + education cess) provided you are on 10% tax bracket with Taxable income above 2.5 lakhs
3. Similarly, you could potentially save on tax between 5,150/- to 15,450/- on the additional 50,000/- invested on investments under 80 C.
If you add up 1, 2 and 3, assuming that you are on the highest tax bracket, you take home an extra 15,300 to 35,900 depending on your tax bracket.
- 36,050/- an year if you are on 30% tax bracket
- 25.750/- an year if you are on 20% tax bracket
- 15,450/- an year if you are on 10% tax bracket
Provided you have taxable income in the highest tax bracket at 30% and you utilise the additional exemptions( 1 lakh ) made available in 2014-15 budget, you could save as much as ₹ 3004.17 monthly!!