Union Minister Piyush Goyal will present the Interim Budget 2019 in the Lok Sabha on Friday in absence of Finance Minister Arun Jaitley who is in the USA for medical treatment. The standard deduction for salaried persons raised from Rs 40,000 rupees to Rs 50,000.
Finance Minister Piyush Goel has chosen to put extra money in the pockets of the middle class in an election year.
He said with this, individuals who are earning gross income of Rs 6.5 lakh per year and have made investments in savings instruments, will be exempt from paying income tax. Subsequently, you pay tax at the rate of 5% for taxable income between ₹2.5 lakh and ₹5 lakh, 20% for income between ₹5 lakh and ₹10 lakh and 30% for income above ₹10 lakh. "However, anyone with a net taxable income above Rs 5 lakh will not be able to avail this tax benefit and only get the standard deduction benefit". "So, if your taxable income is ₹5.25 lakh, tax without cess will be ₹17,500 (5% of ₹2.5 lakh that falls in the first tax slab and 20% of ₹25,000 that falls in the next slab)", said Kuldip Kumar, partner and leader, personal tax, PwC India.
For senior citizens (aged 60 years or above but less than 80 years), income up to Rs 3 lakh comes free of tax.
The proposal to hike TDS exemption limit on bank and post office deposits from Rs 10,000 to Rs 40,000 per year will bring in new depositors and ease tax administration for small savers. Besides the farm sector, it is clearly aimed at targeting the distressed middle class taxpayers and boosting their confidence.
Earlier, banks would start deducting TDS if your interest income in a year exceeded Rs 10,000.
This will not mean any tax benefit, but it will result in greater convenience.
The Income Tax department will move towards faceless assessment and verification of returns, Goyal said Friday.
"This change will benefit people who do not have any taxable income but have interest income in excess of Rs 10,000, say, a housewife", says Deepesh Raghaw, founder, PersonalFinancePlan.in, a Securities and Exchange Board of India-registered investment advisor.