Income Tax update Budget 2019: Joy for salaried employees; income tax rebate up to Rs 5 lakh announced

Budget 2019: Budget 2019 has brought much-awaited joy for income tax payers as the Narendra Modi government has doubled the tax rebate limit to Rs 5 lakh from earlier Rs 2.5 lakh. The salaried employees and common man were eagerly waiting for the budget amid the ongoing chatter around income tax reforms that could be introduced. CII has already demanded to double of income tax rebate to Rs 5 lakh and the government has paid heed to the popular demand. Besides this, the Standard Deduction has also been increased by Rs 10,000 to Rs 50,000.

"Individual taxpayers having taxable annual income up to Rs 5 lakhs will get full tax rebate and therefore will not be required to pay any income tax. As a result, even persons having gross income up to Rs 6.50 lakhs may not be required to pay any income tax if they make investments in provident funds, specified savings, insurance etc. In fact, with additional deductions such as interest on home loan up to Rs 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance, medical expenditure on senior citizens etc, persons having even higher income will not have to pay any tax. This will provide tax benefit of Rs 18,500 crore to an estimated 3 crore middle class taxpayers comprising self employed, small business, small traders, salary earners, pensioners and senior citizens," said Goyal in his speech.

Check details here:

Budget 2019 LIVE Streaming on Zee Business:

Check Income Tax Slabs change from Budget 2019:

13.0 pm: How you benefit from the new rules, explains Sanjay Agarwal, Senior Partner, TASS Advisors

The finance minister finally came up with much awaited announcements, which brought a big cheer to a common man. Whether this was an election move to please people or a commitment for the general benefit of people is open for all to argue.

Though there were no major expectations from this budget as it was an interim Budget , yet there was a pleasant surprise for the middle class income tax payers in the form of increase in rebate up to 500000 and increase in standard deduction for salaries people upto 50000. There was also some disappointments with regard to the expectations of increase in deduction limit under section 80 C.

Below are the major changes as regards to direct taxes.

1. With investments us 80C, the rebate limit becomes 6.5 lacs.

2. Standard deduction raised to 50000 from 40000 for salaries tax payers.

3. Deemed income from rent from HOUSE PROPERTY  - Exempt for 2 houses now.

4. TDS on interest fro post office deposits  raised to 40000 from 10000

5. TDS threshold limit on rental income Increased to 2.4 lacs from 1.8Lacs

6. Roll over if Capitalgains increased under section 54 to 2 Residential houses Upto  Capital Gains Of 2 Cr. To be availed once in a life time.

7.  80 IB (8) Benefit extended for 1 more year.

8. REAL ESTATE - Income Tax on Notional rental limit increased to 2 years from 1 yr.

12.47 pm: Comments from Deloitte India on Income Tax rebate

* Income tax proposals focused largely on providing relief to middle class and lower middle class tax payers

* Government proposes substantial relief to small income tax payer for the first time notwithstanding substantial revenue loss in these proposals

* Time limit for registering affordable housing projects extended by 1 year … projects registered upto 31st March 2020 to get additional income tax deduction 

* Real Estate sector to benefit from exemption on notional rent on unsold inventory from one to 2 years

* Exemption on capital gains under Section 54 on second house is again a huge benefit for honest taxpayers and also a boost to real estate sector

* TDS threshold on interest income from deposits is increased from 10000 to 40000 … relief to small depositors and non-working spouses 

* Exemption of notional rent on second house is a huge gain for honest tax payers

* Increase in standard deduction of  Rs 10000 is a negligible benefit for salaried class

* 3 crore taxpayers to get relief from the new increased threshold

* No change in income tax rate but increase in income tax exemption is a gift to salary class tax payers

* Government recognizes for the first time  that 5 L income per annum is in effect the subsistence limit for a good life and should not be taxed

* Increase in exemption limit is likely to be the biggest highlight of this budget

FM Piyush Goyal on #Budget2019 #BudgetForNewIndia pic.twitter.com/f1nQ4bUszM

— PIB India (@PIB_India) February 1, 2019

12.42 pm: Sanjay Agarwal, Senior Partner, TASS Advisors, explains the tax rebate here:

* Limit of Income tax Rebate under section 87A has been increased to Rs. 12500 from Rs. 2500 for taxpayers having income up to 5 lacs.

* This would benefit the lower and middle class tax payers.

* TDs threshold for rent (sec 194I) has been increased from 180000 to 240000

* LTCG Exemption u/s 54 available on 2 residential houses for gains upto Rs 2 crore which can be availed once in lifetime

* Exempt levy of INcome tax of notional rent on second house property

* For salaried persons - standard deduction raised from 40000 to 50000

* TDS threshold limit on interest raised from 10000 to 40000

* Standard deduction also increased from 40k to 50k to benefit small income group 

12.40 pm: Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments in provident funds and prescribed equities. Around 3 crore middle class taxpayers will get tax exemption due to this measure. Standard tax deduction for salaried persons raised from 40,000 rupees to 50,000 rupees. TDS threshold on interest on bank and post office deposits raised from 10,000 to 40,000 rupees. TDS threshold on rental income raised from 1.8 lakh to 2.4 lakh rupees. Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees; can be exercised once in a lifetime: FM Piyush Goyal 

12.37 pm: No tax for income from rental house: FM

12.36 pm: Standard deduction limit increased by Rs 10,000 to Rs 50,000 from earlier Rs 40,000: FM

12.30 pm: BREAKING -- FM Jaitley proposes that there should be no tax for people earning Rs 5 lakh per annum. The current tax slab will continue for this financial year.

12.24 pm: Election booster has been given in terms of announcement for farmers and social security initiatives. The government may have restrained from making any direct tax announcements so as to keep away the allegations from the opposition to say it is an election driven budget. It seems they have a long term vision for the upliftment of the country rather than for short term political gains: Sanjay Agarwal, Senior Partner, TASS Advisor

12.19 pm: There are no major announcements regarding the direct taxes. This could be due to the interim budget. Government may have taken a call to defer the major announcements to new term: Sanjay Agarwal, Senior Partner, TASS Advisor

12.13 pm: The eprocessing was not successful in year one as many assessees had faced and are facing its agony where there is no answer available with the tax authorities: Sanjay Agarwal, TASS Advisors.

12.12 pm: It is seen that the expectation has been crushed for a common man who was wishing to get some higher exemption and also some more benefit under 80c. The budget just kept silent on these aspects which has been highly disappointing: Sanjay Agarwal, Partner, TASS Advisors

12.00 pm: 99.54% returns have been accepted without any scrutiny. Direct tax collections from 6.38 lakh crore rupees in 2013-14 to almost 12 lakh crore rupees; tax base up from 3.79 crore to 6.85 crore. Simplification of direct tax system will benefit taxpayers; direct tax reduced and tax interface made simpler and faceless to make life easier; resulting in increase in tax collections and return filings: FM Shri Piyush Goyal 

FM Piyush Goyal on #Budget2019 pic.twitter.com/kj25bQXUHx

— PIB India (@PIB_India) February 1, 2019

11.59 am: In the last 5 years under all categories of workers, minimum wages increased by 42% which is the highest ever: FM Piyush Goyal

11.54 am: Increase in gratuity limit is quite encouraging and provides a relief to salaried class. It will result in tax saving up to 300,000 at the time of retirement.: Shipli Agarwal, Partner, TASS Advisors

11.50 am: 3% tax benefit on women owmed MSMEs which indicates strong movement towards women empowerment: Sanjay Agarwal of TASS Advisors.

11.40 am: ESI scheme threshold limit raised to Rs 21000 from the existing Rs 15000. Gratuity payment threshold limit raised to Rs 20 lakh from existing 10 lakh.

11.30 am: Government should provide a much awaited increase in the tax slab from 2.5 lakh to at least 3.5 lakh: Sanjay Agarwal, Partner, TASS Advisors

11.06 am: FM Goyal says NDA government has brought down the inflation to an all time low in last few decasdes. 

11.00: FM Piyush Goyal presents Interim Budget 2019.

10.15: Hold your breath. Budget will be presented soon.

#BudgetWithZEE | #Budget2019 पेश होने में अब बस कुछ ही देर का वक्त बाकी।@AnilSinghviZEE pic.twitter.com/yhCXoz7Zj2

— Zee Business (@ZeeBusiness) February 1, 2019

9.55 am: President shares pictures of meeting with Finance Minister Piyush Goyal

As per tradition, Finance Minister @PiyushGoyal calls on #PresidentKovind at Rashtrapati Bhavan before presenting the Union Budget pic.twitter.com/yZfFL8uVKs

— President of India (@rashtrapatibhvn) February 1, 2019

9.38 am: Amid all this budget buzz, let us remind you that this is an Interim Budget.

9.25 am: Interim Finance Minister Piyush Goyal shows Budget Briefcase to media. Budget documents reaches Parliament.

#BudgetWithZEE | वित्त मंत्री पीयूष गोयल ने मीडिया को बजट ब्रीफकेस दिखाया।#Budget2019 @PiyushGoyal pic.twitter.com/Lh8PtqyrQd

— Zee Business (@ZeeBusiness) February 1, 2019

9.20 am: Zee Business' Swati Khandelwal says there may be changes in the income tax slabs. Watch full report below:

बाजार के लिए बजट में क्या होगा बड़ा ऐलान?
निवेशकों को बजट से मिलेगी बड़ी खुशी?
क्या LTCG में होगा बदलाव?
देखिए LTCG टैक्स से जुड़ी बड़ी खबर स्वाति खंडेलवाल के साथ।@SwatiKJain @AnilSinghviZEE #LTCGHatao pic.twitter.com/GME95tpFgy

— Zee Business (@ZeeBusiness) February 1, 2019

8.40 am: Will there be any change in the tax slabs to give relief to middle class? Calculate your tax for FY18-19 and FY19-20 here

8.30 am: READ -- Budget 2019 LIVE streaming: Benefits for income taxpayers, farmers, women, elderly, students expected; Will Piyush Goyal bring cheers?

8.21 am: In the last budget, the finance ministry has introduced a standard deduction of Rs 40,000 which gave around Rs 5,000 exemption benefit to the salaried class.

7.40 am: Experts have demanded that the finance ministry should also increase the Section 80C limit to around 3 lakh from present 1.5 lakh.

7.20 am: If you don't know whether you are in a tax bracket or not, you can CALCULATE YOUR INCOME TAX here

7.00 am: Sources have informed Zee Business TV that Tax exemption limit may be increased to Rs 5 lakh

6.50 am: Budget to be presented at 11 am. Will it be populist one? Experts demand revisiting of tax slabs.