Budget 2019: 5 big announcements for the salaried class

Budget 2019: 5 big announcements for the salaried class

The threshold for tax deduction at source on rent has gone up to Rs 2.4 lakh from current Rs 1.8 lakh.

This means that anyone with net taxable income up to Rs 5 lakh will not be required to pay any taxes. The finance minister announced that within the next two years, the assessment of all tax returns will be done electronically without any personal interface.

All those earning up to Rs 5 lakh a year will now receive a full tax rebate. So the tax rate of 5% for income slab between ₹2.5 lakh and ₹5 lakh for non-senior tax payers still applies. This will be an interim budget ahead of 2019 Lok Sabha Elections, in which the PM Narendra Modi-led NDA government will try to woo voters through tax sops.

Interest income earned up to Rs 40,000 will not attract any tax, Goyal said. For the higher income category, while the direct savings amount to only Rs 3,000 per year, there is a sense that the affluent would be relieved to see no addition to their existing tax burden.

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Gratuity limit increased Gratuity limit hiked from Rs 10 lakh to 30 lakh for employees with service of at least five years from the next fiscal. "Enhancing the threshold for TDS on interest from banks and post office deposits to Rs 40,000 and on rental payments to Rs 2,40,000 annually will bring relief again for middle class taxpayers", said an analyst. Add to this, the standard deduction of ₹50,000. "With increase tax rebate, it is expected that surplus cash will be available in the hands of the consumers thus resulting in a slight off-take of consumption", said Jimmy Patel, MD & CEO, Quantum Mutual fund. Now, they will do so only if it exceeds Rs 40,000.

While the rebate is applicable only on individuals with taxable income up to ₹5 lakh, those who earn more can also benefit if deductions are included.

Earlier, people had to fill form 15H (for senior citizens) and Form 15G (for others) declaring that they did not have any taxable income and, hence, the bank should not deduct TDS. "Within almost two years, all assessment and verification of IT return will be done electronically by an anonymous tax system without any intervention by officials".

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