New Delhi – Thanking the tax payers of India for their contribution towards nation building, the government introduced a number of income tax proposals in the Interim Budget 2019-20 including raising the income tax exemption limit to Rs 5 lakh and standard deduction from Rs 40,000 to Rs 50,000.
“On behalf of all the people of India and our government, I would first like to thank all our taxpayers for their valuable contribution to nation building and for providing a better life to the poor and marginalised sections of society,” said finance minister Piyush Goyal while presenting Interim Budget 2019.
“Thank you, taxpayers,” he added.
Acknowledging the contribution of the middle class taxpayers, the finance minister said though convention beckons tax proposals be presented in the regular budget, small taxpayers, pensioner and senior citizens need certainty in the beginning of the year about their taxes.
“Therefore, proposals, particularly relating to such class of persons should not wait,” he said.
The government increased the income tax exemption limit from Rs 2.5 lakhs to Rs 5 lakhs in the coming fiscal.
Those who have invested Rs 1.5 lakhs in income tax-saving instruments like provident fund, specified savings, insurance will not be required to pay taxes up to Rs 6.5 lakhs.
“Those 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 with even higher income will not have to pay any tax,” the finance minister said.
This relief is expected to benefit 3 crore middle class taxpayers.
Apart from this, the government also increased the standard deduction limit from Rs 40,000 to Rs 50,000. This is expected to provide an additional tax relief of Rs 4,700 crore to the 3 crore taxpayers.
For the benefit of small depositors, tax deducted at source (TDS) on income earned from bank deposits and post offices was increased from Rs 10,000 to Rs 40,000.
The government exempted the levy of income tax on notional rent on a second self-occupied house.
Goyal has also proposed to increase the TDS threshold on rent frm Rs 1.8 lakhs to Rs 2.4 lakhs. The benefit of capital gains up to Rs 2 crore through investments under Section 54 of the Income Tax Act will now be extended to two residential houses instead of one earlier.