Budget 2019: What is in store for the salaried class
Budget 2019 has brought some good news to the salaried, tax-paying segment
The Budget 2019 is out. It is being hailed as the ideal pre-election budget, with experts saying that it has everything for everyone – farmers, house buyers, employees, and so on. The biggest cheer is coming in from the taxpaying class. Let’s see how the salaried class stands to gain from this year’s budget.
- In his budget speech, Piyush Goyal has proposed to raise the income tax threshold from 2,50,000 to 5,00,000. However, if you dig deep down to analyze this clause closely, this provision will only stand to benefit the lower income groups. Section 87 A of the Income Tax Act has a Clause B which seeks to provide relief to taxpayers by increasing the rebate to Rs.12,500 from the earlier limit of Rs.2,500. The rebate can be claimed by individuals having a total income of 5,00,000 instead of an earlier limit of 3,50,000. This means that the rebate will be available to only those with a taxable income of less than 5,00,000 after making all the deductions. There are no changes in tax-slabs for higher income groups.
2. Standard deduction limit for the salaried and pensioners has increased from 40,000 to 50,000. With this, those falling in the salary group of 5 lakh-10 lakh, will save Rs.2080, those between the income slab of 10 lakh-50 lakh will save Rs. 3120 and those with an income above 50 lakh will save Rs.3432.
3. Under the section 54 of the Income Tax Act, the benefit of rollover of capital gains will be increased from investment in a single residential house to two residential houses for those having capital gains up to Rs. 2 crores. This exemption can, however, be claimed only once in a lifetime.
4. The finance minister has proposed to extend the benefit of self-occupied property to two houses if it is not let out. In the present scenario, this was limited to just one property. For instance, if you have three properties, and you are occupying just one of those, with the other two not being given on rent, any two out of those three properties will be considered “self-occupied”. The third property will be deemed to be rented out and shall be taxed accordingly.
5. For individuals up to 60 years, TDS limit has been raised for income accumulated from banks and post office deposits. The earlier limit of Rs.10,000 has been raised to Rs.40,000
6. The government has also announced additional deductions, namely, interest on a home loan up to Rs.2 lakh, National Pension Scheme contributions, medical insurance, medical expenditure on senior citizens, interest on education loans. This will provide a collective relief of Rs.18,500 crore to over 3 crore middle-class taxpayers.
7. TDS threshold for the tax deduction on rent has been increased to Rs. 2.4 lakh from Rs.1.8 lakh.
8. A group of ministers has been appointed to reduce GST burden for home buyers. They will examine the same.
9. In addition to this, high-level taxation levied on several commodities has been rationalized that is expected to provide relief of up to Rs.80,000 crore to middle-class tax-payers.