In a major relief to the middle-class, Finance Minister Piyush Goyal Friday proposed to double the threshold tax exemption limit for those having income up to Rs 5 lakh and increased the standard deduction to Rs 50,000 from Rs 40,000. The proposal will benefit 3 crore middle-class tax payers, Goyal said while unveiling the Budget proposals for 2019-20.
Doubling the threshold exemption limit will increase the burden on the exchequer by Rs 18,500 crore. If an individual invests in the specified tax saving schemes of the government, the effective tax-free income limit will be Rs 6.5 lakh a year, while it may go further up with additional avenues like NPS, medical insurance and home loan interest payment. (Agencies)
Income Tax relief measures announceed by FM Piyush Goyal
- Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees; can be exercised once in a lifetime.
- TDS threshold on interest on bank and post office deposits raised from 10,000 to 40,000 rupees.
- Standard tax deduction for salaried persons raised from 40,000 rupees to 50,000 rupees.
- Individual taxpayers with annual income up to 5 lakh rupees to get full tax rebate. Around 3 crore middle class taxpayers will get tax exemption due to this measure.
- "On behalf of all the people of India and our Government, thank all our taxpayers for their valuable contribution to nation-building and for providing a better quality of life to poor and marginalized," says Goyal.
- 12.35 pm: Joe Verghese, Managing Director, Colliers International India, says, “Proposal to give tax rebate for income up to 5 lakhs will help in increasing the home buyer's budget and can provide a big boost in increasing demand for housing.”