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I would like to know the Impact of Union Budget 2016-2017 on HR . Please share your information with examples
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Hi Buddy,
The 2016-17 Budget add provision in PF, which made 60% of PF withdraw is taxable earlier it is tax free.
HRA tax relief is hiked to 60000 per annum from 24000 per annum.
This is what I know.
With Regards
Mr.Thumbs Up
Impact on EPF interest:
All contributions and interest accrued to employee provident fund (EPF) before April 1, 2016, will not attract any tax on withdrawal. Withdrawal of principal amount contributed to EPF after April 1 would also remain exempt from any tax.And
It is only the interest on contributions made after April 1, 2016 which will be taxed.
Impact on HRA
"Raised deduction limit for rent paid by an individual who doesn't have a house and isn't entitled to HRA from the employer to Rs 60,000 pa from Rs 24,000 pa.
Impact on TDS
Increase the threshold limit for TDS in case of withdrawal of PF balances to Rs 50,000 from Rs 30,000.
Impact on NPS
IT marginal changes
Super rich employees will pay higher tax
HR will have to take financial advice to make changes in procedures where budget is impacting the functions of HR-Payrolls of salary,exits due to retirement etc.
Rebate Under 87A: Tax upto Rs. 5000/- will get rebate under 87A. This is increased from Rs.2000 in FY 2015-16. If Taxable income is Rs.3,00,000/-. Tax will be 10% of Rs.50,000/- wiz Rs. 5000/-. This tax gets Rebate under section 87A and net tax will be NIL.
HRA Impact: Is applicable in case of deduction under Section 80GG. (Where employee does not have HRA component in CTC but paying House Rent)
The taxation on Interest of EPF is the most damaging impact for employees.
Hi,
First I Thank all. All the above points are clear to me except HRA.
Am not much aware of HRA rebate and all, Please clarify :
1. All employees will eligible for HRA rebate? Because all are having HRA 20%
2. What is the HRA process , I thought its simply an CTC component. How It reflects on Budget and all.
The answer to your Point 1 is NO.
Such Individual can claim exemption of Rent paid under section 80GG.
Currently the max limit of 80GG is Rs.24,000/- annually. The budget proposes to raise this limit to Rs. 60,000/- annually.
The individual can claim deduction of Rent Paid by filling Form 10BA.
Regarding this Budget announcement, In Coimbatore Regional PF Office not receive the PF Claim forms. But PF officials also Don’t the details regarding Budget.
All proposals in the budget will be applicable only from 01 April 2016 after the budget gets passed in the Parliament.
So one has to wait till PF office get new forms etc.burt taxation provision of EPF.
Hi
The budget has affected the HR industry this year . As an HR manager myself i was reading about the new EPF taxation and how they have revoked it as well because of public opposition . While doing so I came across this very useful article that highlights all the points in the budget 2016 that are pertinent to the HR industry.
Have a look and let me know if this helps
8 Budget announcements all HR managers should know
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