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Every year the ruling government comes up with a budget to plan the sources of finances and its allocation among various sectors and states.But this time on 01/02/2019 being in a year of National Election ,an interim budget in place of Regular budget has been placed before the both houses of parliament. While presenting the Interim budget for FY 19-20, Interim Finance Minister CA Piyush Goel has brought lots of good news to the Industries and middle class taxpayers.
Some of the Quick takeaways from proposal made at the speech of Honourable Interim Finance Minster CA Piyush Goyal in relation to taxation are as follows:
1. NO TAX FOR TOTAL INCOME UPTO INR 5,00,000.00
While Presenting the proposed budget for FY 2019-20, Interim Finance Minister CA Piyush Goel has stated that rebate for Individuals has been increased for Total Income upto 5,00,000.00. It is worth mentioning that Interim Finance Minister has used the word Rebate and has nowhere mentioned change in slab rate. So, if you have total income upto 5,00,000.00 you will have to pay Zero Tax as a result of rebate of INR 12,500 or 10,000.00 (depending on the age) to the Individual.
PLEASE NOTE: if TOTAL INCOME >5,00,000.00 no rebate. Existing Slab Rate stands same*.
2. STANDARD DEDUCTION RAISED TO INR 50,000 FROM INR 40,000.00
Another Proposal which would be a big relief to salaried individual is increase in standard deduction from Income Under head Salary from INR 40,000.00 to INR 50,000.00.An increased benefit of INR 10,000.00 is a big welcome move from the speech of Interim Finance Minister.
3. NO TDS ON INTEREST UPTO INR 40,000
Interim Finance Minister has increase the limit for deduction of TDS on Interest on securities u/s 194A from INR 10,000.00 to INR 40,000.00.It would be a big relieve to the individual who have interest income and as a result of TDS deducted on their Interest Income they have to file their Income Tax Return to claim refund of TDS deducted. So if you are receiving Interest upto INR 40,000, NO TDS would be deducted on Interest.
4. NO DEEMED RENTAL INCOME UPTO 2 HOUSES
For the people having Income from House Property just because of a reason that they own more than 1 house, Interim Finance Minister has said that there would be no Income from House Property if a person is having upto two houses. Earlier if a person has 2 houses ,he has to pay tax on income computed after considering one of the two house as let out and source of rental income.With this Proposed budget, 2nd house property would not be deemed to be let out and there would be no rental income from that House.In other word no deemed rental Income if you own upto 2 houses but if you have 3 or more houses, you have to pay tax on deemed rental income on house in excess of 2 houses i.e 3rd or 4th houses etc.
5. NO DEEMED RENTAL INCOME FOR PROPERTY DEALER UPTO 2 YEARS ON UNSOLD PROPERTY
For Person having Property as a stock during their course of business, Their property would not be deemed to be let out upto 2 years instead of 1 year as earlier. SO NO DEEMED RENTAL INCOME UPTO 2 YEARS ON UNSOLD STOCK OF PROPERTY FOR ASSESSEE ENGAGED IN CONSTRUCTION BUSINESS.
6. NO TDS ON RENT PAID UPTO INR 2.40,000.00 IN COURSE OF BUSINESS
Limit for deduction of TDS for rent paid under section 194I has been raised from INR 1,80,000.00 to INR 2,40,000 p.a. So need to deduct TDS if you are paying rent in course of business upto 2,40,000 p.a.
7. IF CAPITAL GAIN UPTO 2 CR , YOU CAN INVEST IN 2 RESIDENTIAL HOUSES INSTEAD OF 1 FOR EXEMPTION FROM LONG TERM CAPITAL GAIN.
If you have a Capital gain upto INR 2 CR , Interim Finance Minister has brought a big relief through proposed budget ,Now you can invest Capital Gain in 2 residential House Property instead of 1 and get exemption from Long Term Capital Gains.
The above changes in Income Tax Legislation has brought lots of good news to the middle tax payer and has definitely reduced their tax burdens and need for tax compliances to a significant amount. In other words , it was a very well planned budget where the government has done all the right things to capture the trust of people and secure a vote from middle Class Taxpayers.
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