No Income Tax up to Rs 5 lakh; Budget 2019 proposal to come into effect from April 1

Current Income Tax Slabs and Limit: It came as a big surprise and good news for salaried individuals and tax payers when Finance Minister Piyush Goyal made the announcement that individual taxpayers having taxable annual income up to Rs 5 lakh will get a full tax rebate and therefore will not be required to pay any income tax. Goyal said, "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." He added, "In fact, with additional deductions such as interest on a 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." 

According to CBDT chairman Sushil Chandra, the exemption relief of taxable income up to Rs 5 lakh will come into effect from April 1. Chandra told Editorji, "This (exemption) will kick off from 1st of April because the budget will be passed." He said that up to Rs 5 lakh, the rebate will be given to the taxpayer and "no tax will be paid by him." However, the CBDT chairman clarified that the old income tax slab would continue for higher annual incomes above Rs 5 lakh. 

Earlier, it was rumoured that changes will come into effect after the presentation of full Budget by the next government in June this year.

Keeping in mind the huge rebate and benefit that Modi government has extended to income tax payers, the move is surely going to become a talking point, at least till the time Full Budget is tabled.