Personal Finance: Small Mercies, No Big Relief

With two Budgets, taxpayer-friendly moves, legislations for investor and consumer protection, and several steps to make debt mutual funds safer, 2019 was eventful for personal finance. Here’s a recap of the most prominent moves of the year.

- Parvatha Vardhini C

Tax relief

2019 was an election year and there were expectations of big incentives on the personal tax front. There was, however, no big-bang measures for the average taxpayer, either in the interim or the full Budget of 2019-20.

While a hike in the surcharge (selectively rolled back later) affected the super-rich, small taxpayers saw measures that made life a little easier for them. For one, the standard deduction for salaried assessees was moved up by ₹10,000 to ₹50,000.

For assessees other than senior citizens, the income limit for deduction of TDS on bank deposits and post office deposits was moved to ₹40,000 from ₹10,000. Homeowners, buyers, and sellers, too, had reason to cheer.

Exemption from long-term capital gains tax was extended to investment of the gains in two houses, based on certain conditions.

Earlier, if the profit was large and you bought two low-priced houses, the benefit of exemption was available for only one purchase. Similarly, two houses can now be claimed as self-occupied instead of one. Earlier, the second house — even if it was locked or was being occupied by a family member — was deemed to be let out and tax had to be paid on the notional rental income.

The entire 60 per cent of the withdrawable NPS (National Pension System) corpus was officially made tax-free only in the July 2019 Budget, although it was announced orally by the then Finance Minister in 2018. Earlier, only 40 per cent was tax-free, while 20 per cent was taxable at the investor’s slab rates.