Budget 2015: Corp tax to be cut by 5% in 4 yrs

Finance Minister Arun Jaitley on Saturday announced a 5 percent reduction in corporate tax over next four years, abolished wealth tax and replaced it with an additional 2 percent surcharge on super-rich individuals, while increasing service tax that will result in higher cost of variety of services.

In the first full-year Budget of the NDA government that shunned populism, he proposed no changes in personal and corporate income-tax rates for 2015-16 but extended benefits to middle-class by increasing the limit of deduction on health insurance premium from Rs 15,000 to Rs 20,000.

For senior citizens, it will go up from Rs 20,000 to Rs 30,000 and for those above 80 years, not covered by health insurance, deduction of Rs 30,000 towards expenditure on medical treatment will be allowed.

Combining these incentives with others including an enhanced deduction of Rs 1.5 lakh on account of contribution to pension fund as against Rs 1 lakh now, the relief of tax deductions under various sections, including 80C and 80CCD, go up to Rs 4.42 lakh.