INCOME UPTO Rs 5 LAKH TO GET FULL TAX REBATE; HIGHER
STANDARD DEDUCTION PROPOSED
RELIEF OF OVER Rs 23,000 CRORE TO ESTIMATED 3 CRORE SMALL
AND MIDDLE CLASS TAX-PAYERS
TDS THRESHHOLD ON INTERESTS ON SMALL SAVINGS RAISED
BOOST TO HOUSING AND REAL ESTATE SECTOR
FM ANNOUNCES A SLEW OF TAX RELIEFS FOR MIDDLE CLASS AND
SMALL TAX PAYERS
New Delhi, February 1, 2019
Individual taxpayers having taxable annual income up to Rs.5 lakhs will get full tax
rebate and therefore will not be required to pay any income tax. While presenting the Interim
Budget 2019-20 in Parliament today the Union Minister for Finance, Corporate Affairs,
Railways & Coal, Shri Piyush Goyal said “Because of major tax reforms undertaken by us
during last four and half years, both tax collections as well as tax base have shown significant
increase, achieving a moderate taxation- high compliance regime. It is, therefore, just and fair
that some benefits from the tax reforms must also be passed on to the middle class taxpayers”
As a result, the Finance Minister added that even persons having gross income up to Rs. 6.50
lakhs may not be required to pay any income tax if they make investments in provident funds,
specified savings, insurance etc. In fact, with additional deductions such as interest on home loan
up to Rs.2 lakh, interest on education loans, National Pension Scheme contributions, medical
insurance, medical expenditure on senior citizens etc, persons having even higher income will
not have to pay any tax. This will provide tax benefit of Rs.18,500 crore to an estimated 3 crore
middle class taxpayers comprising self employed, small business, small traders, salary earners,
pensioners and senior citizens
.
STANDARD DEDUCTIONS RAISED
For salaried persons, Standard Deduction is being raised from the current Rs.40,000 to
Rs.50,000. “This will provide additional tax benefit of Rs.4,700 crore to more than 3 crore
salary earners and pensioners”, the Finance Minister informed.
TDS THRESHHOLD INCREASED
Tax Deduction at Source (TDS) threshold on interest earned on bank/post office deposits has
been proposed to be raised from Rs.10,000 to Rs.40,000. Shri Goyal said, “This will benefit
small depositors and non-working spouses”. Further, the TDS threshold for deduction of tax on
rent has also been proposed to be increased from Rs.1,80,000 to Rs.2,40,000 for providing relief
to small taxpayers.
MORE RELIEF TO RESIDENTIAL HOUSES
It has been proposed to exempt the levy of income tax on notional rent on a second self-occupied
house. Currently, income tax on notional rent is payable if one has more than one self-occupied
house. Shri Goyal announced the relief considering the difficulty of the middle class having to
maintain families at two locations on account of their job, children‟s education, care of parents
etc.
Further, the Finance Minister proposed to increase the benefit of rollover of capital gains under
Section 54 of the Income Tax Act from investment in one residential house to two residential
houses for a taxpayer having capital gains up to Rs. 2 crore. This benefit can be availed once in a
life time. For making more homes available under affordable housing, the benefits under Section
80-IBA of the Income Tax Act is being extended for one more year, i.e., to the housing projects
approved till 31st March, 2020. Also, for giving impetus to the real estate sector, the Finance
Minister proposed to extend the period of exemption from levy of tax on notional rent, on unsold
inventories, from one year to two years, from the end of the year in which the project is
completed.
0 comments:
Post a Comment