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Important Income Tax Changes In Budget 2019

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Income tax changes were proposed by the Finance Minister in her Union Budget 2019 speech today.

Important Income Tax Changes In Budget 2019
Here are the highlights:
 
  • Aadhaar and and PAN would now be made interchangeable for tax-filing purpose. This will enable those without a PAN to file Income Tax Returns conveniently.
  • While no changes were made to the income tax slabs, there were some benefits announced that will ease burden on the middle class population of the country. Full tax rebate will be provided on income up to Rs 5 lakh in financial year 2019-20.
  • On all home loans for affordable houses costing below Rs 45 lakh, an additional income tax deduction of Rs 1.5 lakh was announced. The deduction limit permitted for interest payment against a loan on a self-occupied house property was increased to Rs 3.5 lakh from Rs 2 lakh .
  • Income tax will be effective on income up to Rs 6.5 lakh (Rs 5 lakh + Rs 1.5 lakh under section 80C) through an increase in rebate.
  • Tax benefit of Rs 18,500 crore was proposed for three crore middle-class tax payers.
  • No tax will be imposed on notional rent on second self-occupied house.
  • Capital Gains exemption under Section 54 will now be made available on two house properties
  • Standard deduction was raised to Rs 50,000 from the earlier Rs 40,000
  • TDS (tax deducted at source) limit was hiked from Rs 10,000 to Rs 40,000 on post-office savings.
  • Rs 1.5 lakh income tax deduction was announced on interest paid on loans for purchase of electric vehicles.
  • 2 percent TDS will be imposed on cash withdrawals of over Rs 1 crore in a year from a bank account.
  • Income tax surcharge was increased for HNIs (high net worth individuals) who earn more than Rs 2 crore a year. For those earning between Rs 2-5 crore, they will have to shell out 3 percent more, with surcharge rate being increased from 15 percent to 25 percent and those earning above Rs 5 crore will have to shell out a surcharge of 37 percent, from the current 15 percent.

Story first published: Friday, July 5, 2019, 14:51 [IST]
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