In the Interim Budget for the fiscal year 2019-20, Piyush Goyal announced some relief to small taxpayers by extending the tax rebate and other similar sops but the Section 80C deduction limit has remained at Rs. 1.5 lakh. From the Union Budget 2019-20, taxpayers expects some of these changes:
Lowering of the income tax rate:
Income tax exemption limit is expected to be increased from the current Rs. 2.5 lakh
Provide relief and rejig when it comes to tax slabs.
For income earned in the range of Rs. 5 lakh to Rs. 10 lakh lower the tax rate to 10% from the current 20%.
Create a new income slab for income between Rs. 10 lakh- Rs. 15 lakh and tax it at 20% as against the current 30%.
For income earnings over Rs. 15 lakh, peak tax of 15% should be made applicable
In contrast to the current scenario, provide rebate of Rs. 12,500 for income upto Rs. 10 lakh versus Rs. 5 lakh currently.
Allow higher deduction
Increase deduction relief allowed for the various expenses and investments under Section 80C from Rs. 1.5 lakh to Rs. 2 lakhs.
For HRA, deduction be increased from 40% to 50% for non-metro cities.
Remove/Reduce LTCG: Citing lower revenue base from the avenue, mutual fund industry and tax payers have been demanding withdrawal of the LTCG tax re-introduced on sale of equity or equity based funds after a holding period of one year at 10%.
No wealth tax relief: The inheritance tax or wealth tax which was earlier scrapped in 2015-16 is not expected to make a comeback in Union Budget 2019-20.
Relief on home loan: Increase in the deduction limit for interest paid on house property from current Rs. 2 lakh.
Allow deduction on interest on home loan for under construction property
Increase deduction on bank interest: Under section 80TTA, increase deduction limit on interest from the current Rs. 10,000 limit.
LTA deduction should be extended once every year: In the current scenario, it is being extended twice every 4 years.