Interim Budget 2019: Saving tax could mean investing in dreams
Feb 28, 2019
FM Piyush Goyal’s interim budget 2019 proposed major tax sops for the middle class and salaried individuals.
Individuals earning up to Rs. 5 lacs get a full tax rebate
While the Finance Minister did not change the tax slabs, he increased the tax rebate amount from Rs. 2500 to Rs. 12,500 for taxable income up to Rs. 5 lacs. So if a taxable income is up to Rs. 5 lacs, there is no need to pay tax.
The standard deduction limit hiked from Rs. 40,000 to Rs. 50,000
The increase in standard deduction by Rs 10,000 equals a saving of Rs 2080 for those earning anywhere from Rs 5 lakh to Rs 10 lakh. It translates into a saving of Rs 3120 for those who earn an income ranging from Rs 10 lakh to Rs 50 lakh and Rs 3432 for those earning more than Rs 50 lakh upto Rs 1 crore. People earning more than Rs 1 crore will save only Rs 3588. Thus, this move is poised to bring more tax savings for salaried classes.
TDS limit on interest from deposits hiked from Rs. 10,000 to Rs. 40,000
As per the existing norms, banks and post office are allowed a 10% TDS if the interest earned from a savings account exceeds Rs. 10,000 in a single financial year. The interim budget 2019 proposes a great relief to depositors by quadrupling the TDS threshold on interest from bank and post office deposits, making interest earnings up to Rs. 40,000 tax-free.
TDS threshold for deduction of tax on rent income hiked from Rs. 1,80,000 to Rs. 2,40,000
A great relief to individuals who depend on rental income, interim budget 2019 has increased the TDS limit on rent paid to them by non-individuals such as corporates. This means they could nullify tax liability as long as the rental income doesn’t cross RS. 2,40,000 per fiscal, instead of claiming for a refund later.
All in all, interim budget 2019 clearly aims to reward the middle-class working Indian for their major contribution to the government’s tax revenues. Time for a prudent investment?