Union Budget 2019
Income tax is directly imposed on personal gains accumulated by individuals and entities belonging to varied income and profit groups. The interim budget for 2019 presented by Indian Union Finance minister Piyush Goyal has brought forth a series of good news for the citizens.
Now that the parliament has approved the government’s 6th and final budget, small farmers are likely to be benefited from the latest alterations. With an annual cash dole of 6000 INR along with a pension scheme for workers associated with unorganized sectors, the budget seems to hold a promising future. From no tax implementation policy on income up to 5 Lakhs to an extended TDS threshold limit, the budgetary policy has introduced a plethora of beneficial changes.
Invest some time to read this informative post for a fair insight into the latest amendments.
Here you go!
No tax implementation on notional rent
Homeowners having more than one self-occupied property are no longer required to pay tax on notional rent. As per the interim budget proposal, income tax exemption has been proposed on second self-occupied properties. This means an individual owning a second house without renting the space will not have to pay income tax for the amount not earned by him/her.
This newly introduced Income Tax rule (as declared in the budget) is said to be beneficial for the people owning more than two houses with no outstanding loan associated with the second one.
You May Read: Income Tax Updates From FY 2017-18
However, the rule might end up making things complicated for those with outstanding loans on their second properties. As a matter of fact, people using housing loan interest on their second house are likely to take a hit as the maximum interest benefits for both houses will be restricted to 2 Lakhs henceforth.
Increase in standard deduction
The purpose of a standard deduction is to reduce your taxable income by reducing your tax liability. The amount last year was 40,000 INR, whereas 2019 will see an increased amount of 50,000 INR.
The increase of 10,000 INR in standard deduction will result in tax savings amounting to 30,000 INR for individuals within the 30% tax bracket. A reduction in tax liability seems to be a positive change brought forth by the interim budget for 2019. Here is a calculative representation of the entire scenario for a fairer insight. Take a look.
A rise in the TDS threshold limit
The raised TDS threshold limit will benefit non-working spouses and small depositors in and around India. As per the latest budget proposal, the TDS threshold limit has been proposed to be raised to 40,000 INR from the current 10,000 INR. Applicable from this month, the TDS will be deducted directly from your banks FDs, provided the income slab exceeds the mark of 40,000 INR in a financial year.
Furthermore, the TDS threshold limited has been proposed to be raised from the current 1.8 Lakhs INR to 2.4 Lakhs INR for the small taxpayers in a financial year. Irrespective of the fact whether you run an online assignment writing service or a retail store of apparels, tax evasion is no way an option. However, this year seems to be in favour of the income tax payers. However, it is to be mentioned that the scheme is applicable to the small taxpayers who have given properties on rent to non-individuals.
This will benefit the property owners who have given their houses to non-individuals, for example, corporate entities and the likes. It is said that the move will pave ways to tax-related convenience for people depending on income generated from rents.
Invest gains in two house properties
You will now be able to invest gains in two house properties that were previously one. This is again an indication that the interim budget for 2019 is likely to benefit a wider base of taxpayers around India.
As a result, individuals who are not able to utilize capital gains by selling houses (either by constructing or purchasing them) can use the amount to buy two houses. It is to be mentioned that the capital gains should not cross the amount of 2 crores. Also, be aware of the fact that this particular benefit can only be availed once in a lifetime.
More savings for individuals earning 6.5 Lakhs INR
This is one of the latest changes that get a special mention. Posted in Times Now, individuals having an annual income of 6.5 Lakhs are entitled to save more income taxes. However, it is to be mentioned that the individual must invest a sum of up to 1.5 Lakhs INR in prescribed savings scheme.
The aforementioned savings scheme falls under section 80C of the Income Tax Act. These include Public Provident Fund (PPF), National Savings Certificate (NSC), insurance schemes, Equity-linked Savings Schemes and the likes.
Apart from this, an individual is also entitled to claim income tax deductions from up to 2 Lakhs INR. These are applicable to interest home loans, National Pension Scheme contributions, education loans, medical expenses on senior citizens, medical insurances and the likes.
You May Read: Income Tax Deductions for 2017-18
Now that you are aware of the five major changes made in the budget this year, put on your thinking cap and share your opinion on how far these newly introduced amendments will prove to be beneficial. According to me, a bit of relaxation concerning the rules in support of Income Tax flexibility and exemptions can be helpful, provided the nation as a whole benefits from the progress.