New Delhi, Feb 29: Union Finance Minister Arun Jaitley presented Union Budget 2016 for the next fiscal year in the Parliament. While the Finance Minister announced increase of 0.5 per cent in the service tax in the Union Budget 2016 making life more expensive, he also made important announcements giving relief to small tax payers in income tax. For individuals with income less than Rs 5 lakhs, the ceiling of tax rebate has been increased.Also Read - Income Tax Rules In India: 10 New Income Tax Rules Effective From April 1

“The taxation is a major tool available to Government for removing poverty and inequality and this has to be cautiously exercised. But, I would like to give relief to small tax payers,” said Arun Jaitley in his Budget speech. The ceiling of tax rebate under Section 87A of IT Act has been proposed to be raised to Rs 5,000 from Rs 2,000 for individuals with income less than Rs 5 lakhs. He said that above 2 crore tax payers would get a relief of Rs 3,000. The limit of deduction of house rent paid under section 80GG has also been raised to Rs 60,000 from the existing Rs 24,000 per annum to give relief to employees who live in rented houses. (ALSO READ: Budget 2016 Highlights: List of items that got costlier after Arun Jaitley’s Budget) Also Read - Attention Homebuyers: Planning To Buy New House? Income Tax Benefits On Affordable Housing Set To Change From Tomorrow

Under the presumptive taxation scheme under Section 44AD of the Income tax Act, the limit of turnover or gross receipts has been raised to two crore rupees from the exiting one crore rupees to benefit about 33 lakh small business people. It frees a large number of such assesses in the MSME category from the burden of maintaining detailed books of account and getting audit done. The presumptive taxation scheme is to be now extended to professionals with gross receipts up to Rs 50 lakh with the presumption of profit being 50% of the gross receipts. Also Read - ITR Last Date: What Happens If You Do Not File Your ITR By March 31? Know Here