The Union Finance Minister Nirmala Sitharaman announced the Union Budget 2019 on July 5 in Lok Sabha. The government has imposed two rates of surcharge on high taxpayers. It includes 3 % surcharge for those who earn more than 2 crores and those individuals who are earning more than 5 crores will now have 7% surcharge. The tax rates and slabs have remained the same for other categories of income taxpayers. Under section 87A income tax act, for the individual whose income is up to Rs 5 lakhs a year, the new income tax rebate is Rs 12,500.
Latest Announcement of Interim Budget 2019
- Individual taxpayers with Rs 6.5 lakhs income are not required to pay tax if they invested in specified savings such as Public Provident Fund, expenses incurred on children's education fee, etc. However, the tax slabs will remain unchanged.
- The proposed Income Tax changes benefitted middle-class taxpayers.
- For salaried persons, the standard deduction was raised from Rs 40,000 to Rs 50,000.
- The Tax Deducted at Source (TDS) on fixed deposits, and postal deposits were exempted for interest earned up to Rs 40,000 from Rs 10,000.
- Individual taxpayers with a taxable income of up to Rs. 5 lakhs got a full tax rebate.
- The rent up to Rs 2.4 lakhs is now exempted from Tax Deducted at Source (TDS).
- The benefit of capital gains of up to Rs 2 crores was increased to investment in two residential houses. This will be availed only once in a lifetime.
- The advantage of the section 80IBA of Income Tax Act was extended for one more year for availing of the affordable housing.
However, the income tax slabs remained unchanged in February's interim budget. With the new announcement of a tax rebate, there is no tax for the individuals whose income is up to Rs 5 lakhs.
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By: Shailaja K