Income tax rebate in interim budget

What to know?

• Individuals earning up to Rs 5 lakh would get a full tax rebate. This will provide tax saving of up to Rs 12,500 for all taxpayers in this bracket. Those who save more can effectively push this rebate up to an income of Rs 6.5 lakh.
• Since this is a rebate and not a slab change, it will not impact the tax incidence of those with larger incomes though it will have some impact for those whose salaries are under Rs 10 lakh as they can add home loans and tuition fees to get additional benefits.
• No changes in Income Tax Slabs for FY 2019-20
• Individual taxpayers having taxable annual income up to Rs 5 lakhs will get full tax rebate
• For salaried persons, Standard Deduction is being raised from the current Rs.40,000 to Rs.50,000.
• TDS threshold on interest earned on bank/post office deposits is being raised from Rs.10,000 to Rs.40,000.
• TDS threshold for deduction of tax on rent is proposed to be increased from Rs.1,80,000 to Rs.2,40,000 for providing relief to small taxpayers.
• Section 54 benefit increased from one residential house to two residential house for a taxpayer having capital gains up to Rs. 2 Crore.
• Exemption from Income Tax on notional rent on second self occupied house property.

Income tax: –

• In India, income tax is levied on individual taxpayers on the basis of a slab system where different tax rates have been prescribed for different slabs and such tax rates keep increasing with an increase in the income slab.
• Such tax slabs tend to undergo a change during every budget.
• Further, since the budget 2018 has not announced any changes in income tax slabs this time, it remains the same as that of last year.
• There are three categories of individual taxpayers:

1. Individuals (below the age of 60 years) which includes residents as well as non-residents

2. Resident Senior citizens (60 years and above but below 80 years of age)
3. Resident Super senior citizens (above 80 years of age)

Income Tax Slabs for Individual Tax Payers & HUF (Less Than 60 Years Old) for FY 2019-20 – Part I

Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Income Tax Slabs for Senior Citizens (60 Years Old Or More but Less than 80 Years Old) for FY 2019-20 – Part II

Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Income Tax Slabs for Super Senior Citizens(80 Years Old Or More) for FY 2019-20 – Part III

   Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.

   Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Income Tax Slabs for Domestic Companies for FY 2019-20 – Part IV

In addition cess and surcharge is levied as follows: Cess: 4% of corporate tax

Surcharge: Taxable income is more than 1Cr. but less than 10Cr.: 7%

Taxable income is more than 10Cr. :12%

(Economy)(Indian express, cleartax)

Pic courtesy:TheFinancialExpress