Budget 2019: No tax relief for middle class, super rich to be taxed even more!
Union Budget 2019: Finance Minister Nirmala Sitharaman left the salaried class disappointed in her maiden budget. Not only were key demands like a higher tax exemption threshold and rationalisation of tax slab not met, she has proposed a higher surcharge on those earning above Rs 2 crore
- Jul 5, 2019,
- Updated Jul 5, 2019 4:09 PM IST
India's upper middle class has been waiting for a tax break for a long time, and Finance Minister Nirmala Sitharaman left them disappointed in Budget 2019 too. She has ignored key demands of the common man as well as industry bodies, be it raising the tax exemption threshold from the current Rs 2.50 lakh or revising the tax slabs or increasing the maximum deduction limit under Section 80C from Rs 1.5 lakh. Instead, the higher income groups are staring at a higher tax outgo.
Saying that those who earn more should also contribute more, Sitharaman announced higher surcharges on individuals with taxable income of over Rs 2 crore. For individuals in the income bracket of Rs 2-5 crore, the applicable surcharge will be 3 per cent while those earning above Rs 5 crore are looking at a surcharge of 7 per cent. For other categories of income payers, the tax rates and slabs remain unchanged.
The lower middle class looking to buy a house, however, has much to cheer. Sitharaman announced an additional deduction of Rs 1.5 lakh on interest on home loans borrowed under affordable housing till March 2020. The tax deduction limit for interest on housing loans was previously Rs 2 lakh. In other words, the amount that can now be claimed as a deduction from a homebuyer's total income is capped at Rs 3.5 lakh, which should encourage the fence-sitters to finally buy a house.
The lower middle class also had much to cheer in Budget 2017 - when former Finance Minister Arun Jaitley reduced the personal income tax in the Rs 2.5-5 lakh bracket to 5 per cent from 10 per cent - and again in the Interim Budget 2019 thanks to the full tax rebate offered to individuals with taxable annual income up to Rs 5 lakh.
But those in the Rs 5-8 lakh slab have been stuck paying 20 per cent tax since 2010-11. The upper threshold for this rate was subsequently pushed up to Rs 10 lakh for FY13, but experts have long pushed for further rationalisation given the steep jump between the first two tax brackets.
Here's a look at the current income tax slabs for individuals under 60 years of age:
India's upper middle class has been waiting for a tax break for a long time, and Finance Minister Nirmala Sitharaman left them disappointed in Budget 2019 too. She has ignored key demands of the common man as well as industry bodies, be it raising the tax exemption threshold from the current Rs 2.50 lakh or revising the tax slabs or increasing the maximum deduction limit under Section 80C from Rs 1.5 lakh. Instead, the higher income groups are staring at a higher tax outgo.
Saying that those who earn more should also contribute more, Sitharaman announced higher surcharges on individuals with taxable income of over Rs 2 crore. For individuals in the income bracket of Rs 2-5 crore, the applicable surcharge will be 3 per cent while those earning above Rs 5 crore are looking at a surcharge of 7 per cent. For other categories of income payers, the tax rates and slabs remain unchanged.
The lower middle class looking to buy a house, however, has much to cheer. Sitharaman announced an additional deduction of Rs 1.5 lakh on interest on home loans borrowed under affordable housing till March 2020. The tax deduction limit for interest on housing loans was previously Rs 2 lakh. In other words, the amount that can now be claimed as a deduction from a homebuyer's total income is capped at Rs 3.5 lakh, which should encourage the fence-sitters to finally buy a house.
The lower middle class also had much to cheer in Budget 2017 - when former Finance Minister Arun Jaitley reduced the personal income tax in the Rs 2.5-5 lakh bracket to 5 per cent from 10 per cent - and again in the Interim Budget 2019 thanks to the full tax rebate offered to individuals with taxable annual income up to Rs 5 lakh.
But those in the Rs 5-8 lakh slab have been stuck paying 20 per cent tax since 2010-11. The upper threshold for this rate was subsequently pushed up to Rs 10 lakh for FY13, but experts have long pushed for further rationalisation given the steep jump between the first two tax brackets.
Here's a look at the current income tax slabs for individuals under 60 years of age: