Budget 2019

With A Big Thank You, FM Goyal Showers His Love On Taxpayers, Homebuyers In His Govt’s Interim Budget

Even if the psephologists denigrate the Interim Budget, terming it absolutely populist and being designed in order to please the voters ahead of the general elections, taxpayers can only be happy about the announcements officiating Finance Minister Piyush Goyal made in his maiden Budget Speech on February 1. (Union Minister Arun Jaitley is currently in New York undergoing treatment over health issues.)

While a large part of Goyal’s one-and-a-half hour speech was spent in highlighting his government’s remarkable work in the past four-and-a-half years, he took the taxpayers of the country by surprise ─ a pleasant one to be correct ─  towards the concluding parts of the Budget Speech.

Now let us understand, who gets what?

Bonanza for taxpayers

The FM has proposed to double the threshold income tax exemption limit to Rs 5 lakh from the current Rs 2.5 lakh and has increased the standard deduction from the existing Rs 40,000 to Rs 50,000, inviting appreciation from his colleagues in the House, who applauded the move by liberal thumbing if their desks.

“As a result, even persons having gross income of up to Rs 6.50 lakh may not be required to pay any income tax if they make investments in provident funds, specified savings, insurance, etc.,” Goyal said

“With additional deductions such as interest on home loan up to Rs 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance, medical expenditure on senior citizens, etc., persons having even higher income will not have to pay any tax,” the FM added.

The move, said the FM, would benefit an estimated three crore middle-class taxpayers, comprising self-employed, small business, small traders, salary earners, pensioners and senior citizens.

In a move that will help small depositors, especially the homemakers in the country, the FM has decided to increase the TDS (tax deducted at source) threshold on interest earned on bank/post office from Rs 10,000 to Rs 40,000.

Check out how the change impacts you!
	Existing	Proposed	Existing	Proposed	Existing	Proposed
Salary	5 lakh	5 lakh	7.5 lakh	7.5 lakh	20 lakh	20 lakh
Std deduction	40,000	50,000	40,000	50,000	40,000	50,000
Net total income	4.6 lakh	4.5 lakh	7.1 lakh	7 lakh	19.6 lakh	19.5 lakh
Tax	10,500	10,000	54,500	52,500	300,500	297,500
Net tax	10,500	None	54,500	52,500	300,500	297,500
Surcharge
Education cess	420	None	2,180	2,100	12,020	11,900
Total tax	10,920	None	56,680	54,600	312,520	309,400
Total savings		10,920		2,080		3,120

All figures in Rs

Boost for property owners, landlords

Property owners, who own more than one self-occupied property, certainly have a reason to be happy with the officiating FM. As it stands now, they have to pay income tax on the notional rent on the second property even if it self-occupied. They will not have to do that anymore.

“Considering the difficulty of the middle-class having to maintain families at two locations on account of their jobs, children’s education, care of parents etc., I am proposing to exempt levy of income tax on notional rent on a second self-occupied house,” the FM said in his Speech.

Relief for landlords

On rent: For proving a relief to landlords, the government has also proposed to deduct the exemption limit of tax on rent from Rs 1.80 lakh to Rs 2.40 lakh. Under Section 194I of the Income Tax Act, tenants are liable to 

Source: https://www.proptiger.com/guide/post/union-budget-and-tax-payers