Budget: How Much More Individual Tax Payers Save

In his Union Budget, Finance Minister Arun Jailtey doubled transport allowance from Rs 800 to Rs 1,600 per month and raised health insurance premium deduction from Rs 15,000 to Rs 25,000. In order to promote social security, Mr Jaitley proposed an additional deduction of Rs 50,000 to be provided for contribution to the New Pension Scheme under Section 80CCD. (Read)

Tax consultants BMR Advisors said the new announcements will lead to tax savings of Rs 22,000 for those in the Rs 10 lakh to Rs 15 lakh income bracket. Those in the Rs 5 lakh to Rs 10 lakh income bracket can save Rs 14,000, BMR Advisors estimated.

However, people with income between Rs 2.5 lakh and Rs 5 lakh as well as those with income of less than Rs 2.5 lakh will have nil tax savings, BMR Advisors noted.

In his Budget speech, Mr Jaitley said an individual tax payer will get tax benefit of Rs 4,44,200 after taking into account the tax concession given to middle class tax payers in the last Budget and this Budget. (Read the full story here)

Assumptions: Deductions include provident fund, new pension scheme (NPS), medical insurance, transport allowance and housing loan interest.