Budget 2019: No tax for Rs 5 lakh income, says FM. Others will need to wait for next budget
Budget 2019: The government has kept the income tax slabs as before but promised to complete ITR processes in 24 hours.Updated: Feb 01, 2019 17:43 IST
Finance Minister Piyush Goyal in Budget 2019 proposed full rebate in income tax to people with annual taxable income up to Rs 5 lakh, a move that will ensure they will not have to pay income tax. The minister told parliament that if a tax payer makes an investment of up to Rs 1.5 lakh in provident fund and other approved instruments, the people with income of up to Rs 6.5 lakh per annum would stand to benefit.
But taxpayers who earn anything more will not benefit from this relaxation. For now.
At a media briefing later, Goyal explained that he had not tinkered with the tax slabs in the interim budget at this stage and the changes would be made when the government presented the full budget after the general elections. The decision to offer full rebate was offered because many people would have to pay taxes and later, go through the process of filing tax returns and seeking refunds from the tax department.
“Individual taxpayers having annual income upto Rs 5 lakhs will get full tax rebate. Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments in provident funds and prescribed equities,” said Goyal.
Goyal further announced raising the cap on standard deduction from Rs 40,000 to Rs 50,000 per annum.
The finance minister proposed to increase the threshold of tax deduction at source (TDS) on rental income from Rs 1.8 lakh to Rs 2.4 lakh. TDS threshold on interest on bank and post office deposits has been raised from Rs 10,000 to Rs 40,000 in the Budget 2019.
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“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. India became one common market with implementation of GST,” said Goyal.
The finance minister said, “This is not just an Interim Budget, this is a vehicle for the developmental transformation of the nation.”
Goyal said that direct tax collections have improved significantly over the last five years. Goyal said, “Direct tax collections increased from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore; The tax base is up from Rs 3.79 crore to 6.85 crore.”
He said reducing tax burden on middle class has been the “priority” of the government. However, the finance minister did not announce any change in the existing income tax rates, much against the speculation over the last few days.
The minister also said all income tax returns will now be processed in 24 hours of filing by the tax payers. The refunds would be issued simultaneously. He said that within next two years, income tax returns chosen for scrutiny will also be done digitally with anonymity.
All assessment will be done electronically without any personal interface between tax collector and tax payers, he said.