Budget 2019: Highlights on Taxes

 Let’s take a look at the income tax slab rate for financial year (FY) 2019-20:

Income Tax Slab for Financial Year 2019-20      

Surcharge (for individuals in high income bracket):

• 10% of income tax, if the total income of the individual is between Rs.50 lakh-1crore
• 15% of income tax, if the total income of the individual is above Rs.1 crore
• 2% education cess continues
• The limit of tax exemption U/S 80GG remained same as Rs. 60,000 per year
• Standard deduction for salaried has been increased from Rs. 40,000- Rs. 50,000
• Tax Deducted at Source (TDS) limit increased from Rs. 10000-Rs. 40000 from interest on bank FD
• Tax Deducted at Source (TDS) limit on rent increased from Rs. 1.8 Lakh-Rs. 2.4 lakh
• Tax exemption applicable up to maximum limit of Rs. 50,000 on health insurance premium and medical bills of senior citizen

Further adding to his statement Mr Goyal said that an additional deduction like interest on education loan, interest on a home loan up to Rs. 2 Lakh, medical insurance, contribution towards National Pension Scheme, medical expenses on a senior citizen, etc. will not have to pay any tax even if the income of an individual is higher. This will offer tax rebate of Rs.18, 500 crores to an approximate of 3 crore middle-income tax payers including small business, self-employed, salaried person, small traders, senior citizens, and pensioners.

However, after the Lok Sabha elections, the responsibility of implementation of full tax rebate will fall on the shoulders of the next government.

As stated by Mr. Piyush Goyal the standard deduction would be increased from Rs. 40,000 to Rs. 50,000. In budget 2018 the finance minister Mr. Arun Jaitley presented a standard deduction of Rs. 40,000 for salaried class. In substitute for the existing deduction of Rs. 19,200 for transport and Rs. 15,000 for medical reimbursement, the additional deduction was proposed.

Mr Goyal also said that  for the benefit of the individuals, the tax interface will be made simpler so that it can increase the return fillings and collections. The union minister mentioned that tax survey will be done electronically and there will be no communication between tax payers and tax authority.

The tax interface would be made simpler, resulting in an increase in tax collections and return filings, said Mr Goyal. He also mentioned that the direct tax collections were up from Rs. 6.38 lakh crore in 2013-14 to almost Rs. 12 lakh crore. He said the tax base was also up from Rs. 3.79 crore to Rs. 6.85 crore.

Previously in budget 2018, the cess on income tax was increased to 4% from 3% by the finance minister Arun Jaitley across the board of taxpayers. However, the tax slab and income tax rates remained the same.

According to the slab presented in the last budget, the tax exemption was applicable up to Rs.2.5 lakh for individuals below 60 years. 5% tax was imposed for income between Rs. 2.5 lakh to Rs. 5 Lakh; 20% tax was imposed on income between Rs. 5 lakh- Rs. 10 lakh and 30% tax on income above Rs. 10 lakh.