The move is expected to migrate taxpayers from EPF to NPS, which, in turn, will reduce old age poverty. A detailed analysis on how both schemes will be impacted is available here.
Threshold limit for TDS (sec 192A) on withdrawal of EPF is increased from INR 30,000 to INR 50,000. TDS on payments under life insurance policies (section 194DA) and insurance commissions (section 194D) are reduced to half to 1% and 5%, respectively. The threshold u/s 194D has been reduced to INR 15,000. National Savings Schemes is now subject to half the TDS rate at 10%. Threshold for commission income covered u/s 194H is increased to INR 15,000 and rate reduced to 5%. TDS threshold is increased u/s 194C to INR 1 lac, u/s 194LA to INR 2.5 lac and 194G to INR 15,000. On the other hand, cash transactions involving goods or services worth INR 2 lac or more will now be subject to 2% TDS.
Home buyers had to content with announcements u/s 24, u/s 80EE and service tax exemption for affordable housing scheme. Additional exemption u/s 80EE is primarily expected to benefit Tier II/Tier III cities and limited low cost housing schemes in Tier I cities.
Additionally, there are some changes proposed in the advance tax schedule and time limits u/s 139.