Interim Budget 2019: Changes in Income Tax Regime

The Union Minister of Finance Piyush Goyal presented the interim budget. The changes proposed related to the income tax regime are listed below:

• The Finance Minister has increased the tax slab for zero tax to Five Lakh rupees and the standard deduction introduced in the 2018 budget has been increased to Fifty thousand rupees from current forty thousand.

Standard Deduction

Standard Deduction refers to deduction allowed as per the Income Tax irrespective of the expenses met or the investment made by the individual. An individual is not required to disclose any investment proofs or expense bills for this purpose, the Standard Deduction is allowed at a standard rate.

• Additionally, those individuals with gross income up to 6.5 lakh rupees would be exempted from payment of tax if they make investments in provident funds and prescribed equities.
• The TDS threshold for home rent has been increased to 2.4 lakh from Rs 1.8 lakh.
• Interest accruals up to Rs 40,000 in post offices and banks have been made tax free.
• The budget also increased the Income-tax relief on notional rent from unsold houses extended to 2 years from 1 year.
• The exemptions under the capital gain tax have been increased to two crores. Capital gains exemption to be available on 2 house properties
• IT returns would be processed within 24 hours and returns will be paid immediately.

The Minister also announced that within a span of two years all assessment and verification of IT returns will be done electronically by an anonymised tax system without any intervention by officials.

Month: Current Affairs - February, 2019