In addition to raising the income tax exemption limit for individuals from Rs 2.5 lakhs to Rs five lakhs, finance minister Piyush Goyal also raised the standard deduction to Rs 50,000 and provided concessions on interest income from bank deposits and rent, in the interim budget 2019. “Individuals with income up to Rs five lakhs will not be required to pay any tax,” Goyal said, while presenting interim budget for 2019-20 in the Lok Sabha.
He said with this, individuals who are earning gross income of Rs 6.5 lakhs per year and have made investments in savings instruments, will be exempt from paying income tax. “This will provide benefit of Rs 18,500 crores to three crore middle-class tax payers, self-employed and senior citizens,” he said, adding the number of beneficiaries will go up, for those who have made investments in mediclaim and pension.
See also: Interim budget 2019: Live updates
The standard deduction has been raised from Rs 40,000 to Rs 50,000, which will benefit three crore salaried individuals. No tax will be deducted on interest earned on bank and post office deposits, of up to Rs 40,000 annually, up from Rs 10,000 currently.
The budget also proposed to exempt tax on notional rent for unsold housing units for two years. Goyal also proposed that benefit of rollover of capital tax gains be increased, from investment in one residential house to that in two residential houses, for a tax payer having capital gains of up to Rs two crores. However, it can be exercised once in a lifetime, he added. The Income-Tax Department will move towards faceless assessment and verification of returns, Goyal said.