As per the budget proposals 2019, big income tax relief for the salaried class who drawing annual income up to Rs.5 lakh propose to be made tax-free.
Full Tax rebate for Annual Income up to Rs.5 Lakh
The major boost to the salaried class,
- Finance Minister announced during the Interim Budget that all those earning up to Rs.5 lakh a year will not have to pay income tax.
- Until now, the IT exemption was up to Rs.2.5 lakh.
- This will benefit nearly 3 crore middle-class income earners.
- This ensures that there would be a saving of Rs.12,500 for taxpayers who earn less than Rs.5 lakh.
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Good News Taxpayers!!!
- Individuals with gross income up to Rs.6.5 lakh will not need to pay any tax.
- They also avail the full benefit of Rs.1.5 lakh Section 80C deduction.
- As per the proposal, those who earn more than Rs.5 lakh per annum and less than Rs.10 lakh will have to pay Rs.12,500 plus 20% of the amount by which income exceeds Rs.5 lakh.
- When the total income exceeds Rs.10 lakh, they will have to pay Rs.1,12,500 plus 30% of the amount by which income exceeds Rs.10 lakh.
- As per the current tax slabs, for instance
|
INCOME PER ANNUM
|
TAX RATE
|
| Up to Rs.2.5 Lakh |
No Tax |
| Rs.2.5 – 5 Lakh |
5% |
| Above Rs.5 Lakh Limit to Rs.10 Lakh |
20% |
| Above Rs.10 Lakh |
30%
|
TDS
- The Tax Deducted at Source threshold has increased to Rs.40,000 from Rs.10,000.
- There will also be no tax on notional rent on the second vacant house and no TDS on house rent up to Rs.2.4 lakh.
Standard Deduction
- It has raised to Rs.50,000 from Rs.40,000.
- The std deduction is a fixed amount of deduction, which can be reduced by salaried taxpayers, from their gross salary.
- This was introduced last year after being abolished in the Finance Act 2005.
- This deduction replaced the existing transport allowance of Rs.1600 per month and medical allowance of Rs.15,000 per annum last year.
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