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Budget 2019 - Budget Impact On Tax
Publish Date: February 01, 2019
Budget 2019 brought smiles to the middle class as the acting finance minister announced a significant tax rebate, increase in standard deduction, and increase in TDS ceiling limits
As the country waited with bated breath as the acting Finance minister Piyush Goyal opened the mysterious red briefcase and unveil the Union Budget 2019. The budget drew cheers from individual taxpayers as the government presented them and the middle class with major tax gifts.
Read about the impact of the budget on Income tax. Find the major union budget tax exemptions and more by visiting our article on the Impact of Budget on Income tax today!
Here are the some of the highlights from the budget that had an impact on the middle-class taxpayers:
No income tax for resident individuals with an annual income upto Rs. 5 lakhs
In a welcome move, the acting finance minister proposed a full tax rebate to resident individuals with an annual income up to Rs. 5 lakhs. He proposed an increase in the tax rebate to Rs. 12,500 from the current Rs. 2,500 for individuals with income upto Rs. 5 lakh per annum.
Further, no income tax will have to be paid by resident individuals earning upto Rs. 6.5 lakhs provided they fully invest in prescribed equities and provident funds, which are available for deduction under Section 80C of Income tax Act, 1961.
No changes have been proposed to the regular income tax slabs.
Standard deduction increase
A major good news from this year’s budget for the salaried individuals and pensioners was an increase in the standard deduction from Rs. 40,000 to Rs. 50,000. This was one of the important takeaways from the budget for the salaried individual.
Increased TDS threshold on interest from bank and post office
An increase in the TDS threshold has been proposed to Rs. 40,000 from Rs. 10,000 on bank and post office deposit interest payable to resident. Also, an increase in the TDS threshold on rental income was proposed in this budget, and no TDS will be applicable on rental income upto Rs. 2.4 lakhs paid to resident.
No tax on second home
The finance minister proposed no notional rent on a second home in this budget. This will extend the benefit of self-occupied property to two houses instead of one by eliminating the tax on deemed rent from the second vacant house.
No tax on second home
The finance minister proposed no notional rent on a second home in this budget. This will extend the benefit of self-occupied property to two houses instead of one by eliminating the tax on deemed rent from the second vacant house.
Other updates for taxpayers
The acting finance minister reported that the income tax collection increased from Rs. 6.38 lakh crores in 2013-14 to Rs. 12 lakh crores this year; 99.5% of the returns were accepted as filed without scrutiny. He envisioned 100% electronic verification & assessment within the next 2 years and proposed a simplified tax payment interface for the taxpayers. In addition, he announced an anonymous and electronic scrutiny process, eliminating any interaction between the taxpayers and the tax authorities. He also announced fast processing of the IT returns and said that the IT returns would be processed in 24 hours.
Overall, this year’s budget seemed to have a mixed impact. While it promised a boost to the household incomes and made the middle-class taxpayers happy, the rich didn’t seem to gain much from this most awaited event!
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By: Sandhya Kannan, Head – Content
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