ArticlesUpdates

Budget 2019 highlights: Full tax rebate for individuals earning upto Rs 5 lakh/year

By February 1, 2019 No Comments

Budget 2019-20 India Income Tax Slab Rates Changes Expectations: In a major relief for middle-class taxpayers, interim Finance Minister Piyush Goyal on Friday proposed that individuals earning up to Rs 5 lakh would get a full tax rebate. Moreover, individuals with a gross income of Rs 6.5 lakh will have to pay no tax if they make an investment.

However, he left its implementation to the next government for the full-fledged Budget after the Lok Sabha elections.

Goyal also said standard deduction would be raised from Rs 40,000 to Rs 50,000. Finance Minister Arun Jaitley in Budget 2018 introduced a standard deduction of Rs. 40,000 for the salaried class. This additional deduction was proposed in lieu of existing deductions of Rs 15,000 for medical reimbursement and Rs 19,200 for transport
allowance

Goyal further said the tax interface would be made simpler, resulting in an increase in tax collections and return filings. He said direct tax collections were up from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore. He said the tax base was also up from Rs 3.79 crore to Rs 6.85 crore.

The Union minister said tax scrutiny would be done electronically and there will be no interaction between the tax authority and the taxpayer.

“Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by officials. All income tax returns to be processed within 24 hours and refunds to be issued simultaneously,” Goyal said.

Following a drubbing in the elections to the three Hindi heartland states of Rajasthan, Chhattisgarh and Madhya Pradesh amid growing resentment among the middle class, there was pressure on the Centre to provide relief in personal tax.

In Budget 2018, then Finance Minister Arun Jaitley increased cess on income tax to 4 per cent from 3 per cent across the board for taxpayers but did not change the existing tax slabs and income tax rates.

As per the current slabs, for individuals below 60 years, income up to Rs 2.5 lakh is exempt from tax. Five per cent tax is levied on income between Rs 250,001 to Rs 5 lakh; 20 per cent tax on income between Rs 500,001 and Rs 10 lakh; and 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 is exempt from tax. Income from Rs 300,001 to Rs 5 lakh is 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.

For senior citizens aged 80 years and above, income up to Rs 5 lakh is exempt from tax. Income from Rs 500,001 to Rs 10 lakh is taxed at 20 per cent and above Rs 10 lakh is taxed at 30 per cent.

Leave a Reply