Acting Finance Minister on Friday announced a no tax for the individuals with income up to Rs 5 lakh per annum. The income tax proposal is a masterstroke by BJP government’s during the Interim budget, the last budget ahead of Lok Sabha elections. This income tax proposal will benefit three crore taxpayers, Mr Goyal said.
This full rebate will provide tax saving of up to Rs 12,500 for all taxpayers in this bracket. According to Indian Express, these changes are not done in tax slab but a rebate, so it will not impact the tax incidence of those with larger incomes though it will have some impact for those whose salaries are under Rs 10 lakh as they can add home loans and tuition fees to get additional benefits.
Piyush Goyal also announced that interest income of up to Rs 40,000 will attract no tax. He also said standard deduction would be raised from Rs 40,000 to Rs 50,000.
Here are key income tax changes announced in Budget 2019:
- Individuals with gross income up to 6.5 lakh rupees a year won't need to pay any tax; if they invest in provident funds and prescribed equities.
- The move to provide benefit worth Rs. 18,500 crore to 3 crore assesses
- Standard deduction limit raised from Rs. 40,000 to Rs. 50,000
According to slabs announced in the last Budget, income up to Rs 2.5 lakh was exempt from tax, for individuals below 60 years. While 5 per cent tax was levied on income between Rs Rs 250,001 to Rs 5 lakh to Rs 5 lakh; for income 500,001 and 10 lakh a 20 per cent tax. 30 per cent tax on income above Rs 10 lakh.
For senior citizens (aged 60 years or above but less than 80 years), income up to Rs 3 lakh was exempt from tax. Income from Rs 300,001 to Rs 5 lakh was taxed at 5 per cent, from Rs 500,001 to Rs 10 lakh at 20 per cent and above Rs 10 lakh at 30 per cent, according to Indian Express.
For senior citizens aged 80 years and above, income up to Rs 5 lakh was exempt from tax. Income from Rs 500,001 to Rs 10 lakh is taxed at 20 per cent and above Rs 10 lakh was taxed at 30 per cent, Indian Express reports.