1. The BIG change in Individual’s Income Tax Slab Rates
Your tax liability if your income is up to Rs.5 lakh will turn to be ZERO. However, there is no tax slab changes from the Budget 2019.
|Latest Income-tax Slab Rates FY 2019-20 (AY 2020-21)|
|Income slabs||Individual aged (Aged below 60 years)||Senior citizens (Aged 60 years and above but below 80 years)||Super senior citizens (Aged 80 years and above)|
|Up to 2,50,000||Nil||Nil||Nil|
|From 2,50,000 to 3,00,000||5%||Nil||Nil|
|From 3,00,000 to 5,00,000||5%||5%||Nil|
|From 5,00,000 to 10,00,000||20%||20%||20%|
You notice that there is no change in the Income Tax Slab Rates for FY 2019-20. Then how can be it is judged that there is no tax on an individual whose income is up to Rs.5,00,00? There is a change in the rebate available to individuals. Read our Article - -
2. Standard Deduction for Salaried individuals and pensioners increased from existing Rs.40,000 to Rs.50,000
In the last year budget, Government introduced Rs.40,000 standard deduction available for all salaried individuals in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses.
Now, this limit is raised from Rs.40,000 to Rs.50,000.
3. TDS Limit on Bank FDs and Post Office Schemes raised from Rs.10,000 to Rs.40,000
Earlier the TDS limit on the interest you earn was Rs.10,000. Now, this limit is raised to Rs.40,000.
This seems to be the biggest relief to many of us. BUT keep one thing in mind that AVOIDING TDS does not mean AVOIDING TAX.
4. The benefit of rollover of capital gains under section 54 of the Income - Tax Act raised
The benefit of rollover of capital gains under section 54 of the Income Tax Act will be increased from investment in one residential house to two residential houses for a taxpayer having capital gains up to Rs.2 Cr. This benefit can be availed once in a lifetime.
5. Your Income Tax Returns and Refunds will be processed within 24 hours
The government has now approved a path-breaking, technology-intensive project to transform the Income-tax Department into a more assessee friendly one. All returns will be processed in twenty-four hours and refunds issued simultaneously. Within the next two years, almost all verification and assessment of returns selected for scrutiny will be done electronically through anonymized back office, manned by tax experts and officials, without any personal interface between taxpayers and tax officers.
6. Income tax on notional rent on a second self-occupied house abolished
Currently, taxpayers who own two residential houses, which are not self-occupied, are required to impute a notional value for rental income for one property and the value for the other house is taken as zero. The government proposed to exempt levy of income tax on notional rent on a second house self-occupied. Now imputation of notional rental value will apply if the taxpayer owns more than two self-occupied residential houses (i.e. to the third house)
The deduction available on interest paid on the mortgage loan is restricted to INR 200,000 for both above residential houses, on which no notional rent imputation is required.
7. TDS threshold for deduction of tax on rent increased
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.