Budget – 2019
Updated 12:45 PM, February 1
Here are the key announcements of Budget 2019 so far:
- No income tax on income upto ₹ 5,00,000/-/ This amount is exclusive of ₹ 1,50,000 debate under Section 80(c). But there is a catch here. It is only for people having gross income upto ₹ 6,50,000/- only.
- No TDS deduction on interest income upto Rs. 40,000. This limit was Rs. 10,000 earlier.
- TDS threshold on rental income raised from Rs 1,80,000 to Rs 2,40,000. A good news for people having rental income.
- Gratuity limit raised to Rs 20 lakh
- Tax refund in 24 hours.
Tax benefits of current Budget announcements
Though, right now only budget presentation has been done. It will be put to vote and then passed, these announcements still hold some value.
Income Tax – Minimum tax limit raised but slabs unchanged
The minimum tax limit has been increased to Rs. 5 Lakh now. Important point to notice here is that the basic exemption limit of individual has not been raised from 2.5 lakhs to 5.00 lakhs.
Instead section 87A has been amended and stated as :
If the net income is upto 5.00 lakhs after all deduction then only no tax will be charged. Otherwise the last year system will be followed.
Thus, it means this announcement is beneficial for people with gross income upto ₹ 6.5 lakh (including deductions available u/s 80C) only. If you have your gross income above ₹ 6.5 lakh, then old tax slabs are applicable.
But people earning less than Rs 10 lakh can still get the benefit. What they need to do is use other deductions available under tax slabs like investments say Rs 1.5 lakh under section 80C, home loan interest benefit, interest on education loan, standard deduction etc.
Which means if you have home loan, then u/s 24B you are allowed to claim deduction of ₹ 2 lakh and ₹1.5 lakh u/s 80c. These adjustments along with standard deduction of ₹ 50,000 makes your income upto ₹ 9 lakh tax free as you can claim taxable income to be ₹5 lakh now.
Threshold for TDS on interest income from Banks & Post Offices raised
There will be no tax deduction at source (TDS) by bank for interest income on your deposits, upto Rs. 40,000. This clearly saved Rs. 3000 in TDS deduction. Something that you can use to top up your SIP.
Gratuity Limit raised:
The gratuity limit is now increased to Rs 20 lakh. Existing limit is Rs 10 lakh limit.
Real estate announcements
If you are real estate person, then the budget has something for you. First, the notional rent on self-occupied second house is proposed to be exempted.
Secondly, single home owners, who have been earning rental income from their house as they themselves are not living there have good news too.
The threshold limit for TDS on rental income has been increased to Rs 2.4 lakh from Rs 1.8 lakh currently.
It doesn’t end here. If you plan to sell a residential property and plan to use the proceeds to invest in purchase of second residential apartment, then current budget has announced a relief here too.
Earlier, under section 54, you could invest the capital gain proceeds only in 1 residential property.
Now, in current budget it has been proposed that, for once in lifetime, an investor can use the capital gain proceeds for investing in two residential properties. The limit proposed is Rs. 2 crore.
Tax Refunds in 24 hours
With more and more electronic tax filing done, FM announced that soon your income tax returns will be processed in only 24 hours and the refunds will be issued simultaneously.