The Finance Bill, 2019, proposes to increase the benefit of standard deduction from the existing INR 40,000 to INR 50,000 to provide additional relief to salary earners and pensioners
With the elections looming large, interim Finance Minister Piyush Goyal (“FM”) presented the interim budget (or vote on account) to the Parliament. As expected, it sounded more like an election manifesto instead of a budget and most part of the budget was spent on explaining how the present Government has been able to bring in transformational changes in the country through several significant steps.
There were not many significant changes from a tax law perspective as the FM attempted to present a “please all” budget. The changes proposed by him are as follows:
No tax for individuals earning up to INR 500,000
The FM proposed to exempt taxpayers earning upto INR 500,000. This is going to provide complete respite to a large number of marginal taxpayers. In fact, combined with other deductions and incentives, the actual amount could go beyond INR 700,000.
However, instead of changing tax slabs, which would have meant all taxpayers would have received the benefit, the FM proposed to give such benefit only to intended beneficiaries by suggesting a change to Section 87A of the Income Tax Act, 1961 (“IT Act”).
The Finance Bill, 2019, proposes an increase in the amount of tax rebate from INR 2,500 to INR 12,500 for individuals earning up to INR 500,000 (which is the tax payable for somebody having a taxable income of INR 500,000), thereby making sure that individuals who earn more than INR 500,000 would not be entitled to any tax rebate / benefit.
Increase in standard deduction for salaried employees
The Finance Bill, 2019, proposes to increase the benefit of standard deduction from the existing INR 40,000 to INR 50,000 to provide additional relief to salary earners and pensioners.
Once in a lifetime opportunity to claim capital gains exemption by investing in two residential houses
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