Budget 2019 Personal Finance Live Updates: Income tax rebate for those earning under Rs 5 lakh, other benefits

Piyush Goyal leaving for Parliament to present the Budget 2019

Finance Minister Piyush Goyal with MoS Finance ministers Shiv Pratap Shukla and P Radhakrishnan leaves the North Block to present the interim Budget 2019-20 at Parliament. (PTI Photo)

Budget 2019 Personal Finance LIVE Updates: Acting Finance Minister Piyush Goyal will be presenting his first budget on Friday and despite no hints being offered on what to expect, tax benefits were expected.

The Finance Minister has announced the raising for gratuity limit from Rs 10 lakh to Rs 30 lakh. He also announced the creation of a new pension scheme for employees in the unorganised sector. The Finance Minister talked up the various schemes that the government had undertaken to reduce the burden of income tax on the middle class.

And then came the benefits. All those earning less than Rs 5 lakh will get a full tax rebate. There is a reduction in standard deduction. There is tax benefits for interest earned on bank deposits and tax benefits for home sales.

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Track live updates on how Budget 2019 will affect you as acting Finance Minister Piyush Goyal presents it in the Lok Sabha at 11 am.

Criticism for the pension scheme for unorganised workers

Dr DL Karad, national vice president of the left-leaning Centre of Indian Trade Unions (CITU), termed the Rs 3000 monthly pension scheme for unorganised workers an election jumla.

“There is no clarity about the implementation of the scheme. If a worker, who is now 59 years old, pays Rs 100 for next one year, will he be eligible for the pension scheme ? Besides, the large number of workers in the unorganised sector are not registered with the government authorities. It means they will be deprived of the shceme. Also, the government has completely ignored the contract labourers and scheme workers, who are demanding minimum wages and increase in honorarium respectively,” Karad said.

Tax rebate may support consumer spending

Ranen Banerjee, Partner & Leader – Public Finance and Economics, PwC India said,”The income tax sops for the taxpayers will lead to higher disposable incomes for discretionary spends. This will support demand uptick.”

Missed this one – tax benefits for affordable housing projects

For making more homes available under affordable housing, the benefits under Section 80-IBA of the Income Tax Act is being extended for one more year. These are only for homes built under affordable housing schemes.

More praise for the tax breaks in the Budget

Jiger Saiya, Partner/ Tax & Regulatory Services, BDO India, welcomed the announcements. “Government aims to completely digitalise income-tax return verification and scrutiny over the next 2 years, phasing out human intervention. Anonymous scrutiny assessments using a back office, if implemented well, would go a long way in improving the image of the Indian revenue system across tax payers. This coupled with the promised non-adversarial tax regime, would also enhance overseas investor confidence in the Indian tax system,” he said

Also one clarification about the tax rebate announced

The tax rebate offered to those earning up to Rs 5 lakh does not impact other tax payers. Tax slabs have been retained as is. Which means unless you’re earning up to Rs 5 lakh, there’s no obvious benefit for you from this announcement.

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.

Also one clarification about the tax rebate announced

The tax rebate offered to those earning up to Rs 5 lakh does not impact other tax payers. Tax slabs have been retained as is. Which means unless you’re earning up to Rs 5 lakh, there’s no obvious benefit for you from this announcement.

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.

And here are all the reactions to the announcements made today

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Delhi se hoon BC@delhichatter

Middle Class right now 😋😁#Budget2019

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Krishna@Atheist_Krishna

Middle class salaried people watching #Budget2019 from start to finish.

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Mihir@GomingBoy

Middle class after 2019Budget:#Budget2019

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Vipin Media🇮🇳@vipumedia

1. Middle Class b4 FM Speech.
2. Middle Class after FM Speech. #Budget2019 #BudgetForNewIndia

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Tax benefits for those who sell homes

– The benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to Rs 2 crore rupees. However, this can be exercised once in a lifetime, the acting Finance Minister said.

More tax breaks: No tax on interest on bank and post office deposits up to Rs 40,000

– TDS threshold on interest on bank and post office deposits raised from 10,000 to 40,000 rupees

– If you pay rent up to Rs 2.4 lakh then there will be no TDS on it.

More tax breaks: No tax on interest on bank and post office deposits up to Rs 40,000

– TDS threshold on interest on bank and post office deposits raised from 10,000 to 40,000 rupees

– If you pay rent up to Rs 2.4 lakh then there will be no TDS on it.

Standard deduction raised to Rs 50,000, no income tax on notional rent for second self-occupied home

Three crore tax payers are expected to benefit from this including pensioners and senior citizens. Also younger persons who just get their

– Standard deduction raised from Rs 40,000 to Rs 50,000

– No income tax on notional rent on second self-occupied house

No income tax for those earning less than Rs 5 lakh

The Finance Minister said that the existing rates of income tax would stay but

– those with income less than Rs 5 lakh will get full tax rebate (it was 3 lakh earlier) They will not have to pay any tax.

– those with income less than Rs 6.5 lakh can also enjoy rebate if they make investments worth Rs 1.5 lakh

Here come the tax breaks

Finance Minister returned to tax announcements and started by thanking tax payers for paying tax.  He pointed out the various things that tax income was funding.

“Thank you tax payers,” he said.

“it is then equitable that some of the benefits be passed to middle class tax payers…I propose to reduce the burden on these tax payers,” he said.

Goyal talks of all initiatives taken for income tax payers, announces no tax breaks

Reducing burden on middle class has been a focus, Goyal said.

He then spoke of all the tax rebates that had been given so far to salaried employees in its term.   Also all the benefits provided to small industries and companies. But no announcement on tax rebates for now.

Will there be any benefits announced later in the budget?

Income Tax returns up, new system coming

The Finance Minister said there has been a 80 per cent increase in the tax base in India which he says has served the poor and helped develop infrastructure.

He then touted the benefits of the I-T department going digital, with 99 percent of the returns being filed online.

He also spoke of the new scheme that will process I-T returns in a day (it’s been awared to Infosys and you can read more about it here)

Gratuity limit raises from Rs 10 lakh to Rs 30 lakh

The Finance Minister has raised the gratuity limit from Rs 10 lakh to Rs 30 lakh.

Earlier only Rs 10 lakh of gratuity amount was tax-free but that has now been raised to Rs 30 lakh. Gratuity is money paid by an employer to an employees who complete 5 years or more with a company.

Mega pension scheme for labourers

Monthly pension of Rs 3000 under a new scheme for unorganised workers after they turn 60. They will have to contribute just Rs 55 a month in some cases. Rs 500 crore has been allotted for the scheme.

Small farmers to get cash in account, money for farming schemes

The Finance Minister has announced a new scheme to provide direct income transfer to small and marginal farmers. The scheme will provide Rs 6,000 per annum to farmers directly in their accounts.

There are additional allocations to other farming schemes. Benefits for farmers who repay loans. More benefits under the Kisan credit cards.

Finance Minister highlights achievements of the government

The Finance Minister is presently listing all the achievements of the Modi government from the Ayushman Bharat scheme to provide healthcare insurance to the providing of electricity in rural homes. All the announcements are being met with thumps on the desk by ruling party MPs.

Goyal praises the government’s handling of inflation

“We have broken the back of back-breaking inflation,” says the acting Finance Minister to thumps on the desk from other MPs.

The Finance Minister also spoke about how well the Modi government had handled inflation during its tenure.

Among the expectations are that the Finance Minister could raise income tax thresholds from Rs 2.5 lakh to Rs 3 lakh. Another expectation is that people could get further benefits from investing in tools like National Pension System and PPF. There could also be benefits for homebuyers and home owners who give their houses on rent.

[“source=indianexpress”]