Salaried class? Here are key tax announcements in Piyush Goyal's speech you need to know
Speculation was rife that it would be high on appeasing the middle-class, a significant vote bank as well as the biggest chunk of taxpayers, and Goyal certainly met expectations
- Feb 1, 2019,
- Updated Feb 1, 2019 6:12 PM IST
The loudest cheers at Lok Sabha today were reserved for Finance Minister Piyush Goyal's announcement that individual taxpayers having taxable annual income up to Rs 5 lakhs will get full tax rebate. If taxpayers fully avail of the deductions permitted under Section 80C, those with gross income up to Rs 6.5 lakh will no longer need to pay tax if the proposal is accepted. This being the Modi government's last budget before the general elections in summer, speculation was rife that it would be high on appeasing the middle-class, a significant vote bank as well as the biggest chunk of taxpayers, and Goyal certainly met expectations although the buildup to it was very slow.
The bonanza did not end there. TDS on interest income from bank deposits and post office deposits has been raised from Rs 10,000 to Rs 40,000, a move that will benefit small depositors and non-working spouses, he said, adding that the "The TDS threshold for deduction of tax on rent is proposed to be increased from Rs 1.8 lakh to Rs 2.4 lakh."
Moreover, the benefit of rollover of capital gains under Section 54 will be increased from investment in one residential house to two residential houses for a taxpayer having capital gains up to Rs 2 crore. This benefit can be availed once in a lifetime.
For making more homes available under the affordable housing initiative the benefits under Section 80IBA is being extended for one more year for all housing projects approved till March 31, 2020.
Significantly, Goyal acknowledged in his speech that convention dictates that main tax proposals be presented in the main budget, which will be presented by the government that comes to power after the elections. However, he justified the above announcements saying that "small taxpayers, especially the middle class, salary earners, pensioners and senior citizens, need certainty in their minds in the beginning of the year about their taxes, and therefore proposals particularly relating to such class of persons should not wait."
Chances are that Goyal also left a candy dangling to the public when he said that "for the present the existing rates of income will continue for FY19"? Did he mean to imply that there could be more 'achhe din' in the offing if the Modi government remains in power?
The loudest cheers at Lok Sabha today were reserved for Finance Minister Piyush Goyal's announcement that individual taxpayers having taxable annual income up to Rs 5 lakhs will get full tax rebate. If taxpayers fully avail of the deductions permitted under Section 80C, those with gross income up to Rs 6.5 lakh will no longer need to pay tax if the proposal is accepted. This being the Modi government's last budget before the general elections in summer, speculation was rife that it would be high on appeasing the middle-class, a significant vote bank as well as the biggest chunk of taxpayers, and Goyal certainly met expectations although the buildup to it was very slow.
The bonanza did not end there. TDS on interest income from bank deposits and post office deposits has been raised from Rs 10,000 to Rs 40,000, a move that will benefit small depositors and non-working spouses, he said, adding that the "The TDS threshold for deduction of tax on rent is proposed to be increased from Rs 1.8 lakh to Rs 2.4 lakh."
Moreover, the benefit of rollover of capital gains under Section 54 will be increased from investment in one residential house to two residential houses for a taxpayer having capital gains up to Rs 2 crore. This benefit can be availed once in a lifetime.
For making more homes available under the affordable housing initiative the benefits under Section 80IBA is being extended for one more year for all housing projects approved till March 31, 2020.
Significantly, Goyal acknowledged in his speech that convention dictates that main tax proposals be presented in the main budget, which will be presented by the government that comes to power after the elections. However, he justified the above announcements saying that "small taxpayers, especially the middle class, salary earners, pensioners and senior citizens, need certainty in their minds in the beginning of the year about their taxes, and therefore proposals particularly relating to such class of persons should not wait."
Chances are that Goyal also left a candy dangling to the public when he said that "for the present the existing rates of income will continue for FY19"? Did he mean to imply that there could be more 'achhe din' in the offing if the Modi government remains in power?