some ideas suggested by et wealth in earlier issues for the finance ministers team to consider in the draft budget proposal found their way into the finance bill however some suggestions which would have simplified matters for the common taxpayer were ignored hits 1 change in nps tax rules we suggested eee tax exemption at the time of investment accrual and withdrawal status for the new pension scheme nps to bring parity between all pension products although nps will still be treated as eet 40 of the maturity at withdrawal has been made taxfree this is a colossal shift as earlier 60 of the corpus at withdrawal was taxable while the mandatory 40 contributed towards buying annuity was taxfree now of the 60 withdrawn youll have to pay tax on only 20 that 20 too can be taxfree if you buy an annuity with it the monthly pension from annuity contributions however will be taxed at slab rate nps is now more attractive than other insurance pension plans where only 33 of the maturity corpus is taxfree also nps provides the flexibility to switch among six pension fund managers appointed by pfrda the fund management costs are lower too the finance minister as suggested by the kelkar committee has also levelled the playing field between nps and epf by changing the taxability status of epf from eee to eet however nps gives you an equity edge and has higher chances of earning better returns in the longrun than epf 2 higher deduction for those without hra a yearly limit of rs 24000 as exemption under section 80gg for rent paid made little sense at todays rates it is near impossible to rent a house at rs 2000 per month even in a tierii city also while salaried individuals who get hra as part of their compensation could claim big deductions a selfemployed person could claim only up to rs 24000 a year this was unfair for all those who do not earn a structured salary in our budget suggestions bhuwana shreeram head financial freedom golden practices had suggested raising this limit to rs 1 lakh a year although the finance minister has chosen to raise it to only rs 60000 a yearrs 5000 a monththe jump could cut your tax bill by rs 10800 a year 3 more for housing at current interest rates of 10105 if one borrows as little as rs 20 lakh one crosses the rs 2 lakh deduction limit allowed as interest paid on home loan at the same time the average price for a 8001000 sqft home is more than rs 50 lakh in most cities this means for 16 years of a 20year loan term borrowers are paying more than the deduction limit et wealth had suggested a revision the good news is that the finance minister has announced an additional deduction of rs 50000 under sec 80ee however this benefit is limited for firsttime home buyers with loans up to rs 35 lakh