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  • Individuals with Rs 5 lakh income exempted from income tax

    Published on February 1, 2019

    The Finance Minister announced relief for the common man in the middle income group. Although, there will be no change in the existing rates or slabs of Income Tax for the financial year 2019-20, Mr Goyal proposed that individuals having an income of upto five lakh rupees will have not have to pay any tax.

    Even persons having a gross income upto 6.5 lakh rupees may not be required to pay any income tax if they make investments in Provident Funds and specified savings and insurance.

    He said, with additional deductions like interest on home loan of upto two lakh rupees and interest on education loan, national pension scheme contribution, medical insurance, medical expenditure of senior citizen will attract tax relief.

    The budget also hiked standard deduction for the salaried people from the present 40,000 rupees to 50,000.  Considering the difficulties of the middle class, the budget proposes to exempt levy on income tax on notional rent on a second self-occupied house.

    TDS threshold on interest earned on bank and post office deposits is being raised from 10,000 rupees to 40,000 to benefit small depositors and non-working depositors. TDS threshold for deduction of tax on rent is proposed to be increased from one lakh 80 thousand to two lakh 40 thousand.

    The benefits of rollover of capital gains under section 54 of the Income Tax Act will be increased from investment in one residential house to two residential houses for a tax payer having capital gains up to two crore rupees. This benefit can be availed once in a lifetime.

    Gratuity limit has also been increased to 30 lakh rupees. These measures will benefit over three crore middle class tax payers comprising self employed, small businessmen, small traders, salary earners, pensioners and the senior citizen.