Interim budget FY20: Middle-income earners welcome IT relief

Florence Fletcher
February 2, 2019

Union Minister Piyush Goyal will present the Interim Budget 2019 in the Lok Sabha on Friday in absence of Finance Minister Arun Jaitley who is in the USA for medical treatment. This affects farmers owning up to two hectares of land, who will receive ₹ 6,000 as direct income support every year. The government has also increased TDS threshold on deduction of tax on rent, which will benefit the salaried people.

"So people earning up to Rs 6.5 lakh may not have to pay tax if they make investments in specified savings".

Defence budget at Rs 3 lakh crore, an increase of Rs 5,000 crore over a year ago.

Rahul's comments came after the budget was announced by the Modi-government.

About three crore taxpayers will be benefitted from this enhanced standard deduction and revenue forgone for this will be about Rs 4,700 crore, he said. For people earning more than Rs 5 lakh annually, the "old" tax rates will continue.

Pension scheme for unorganised sector workers for monthly income up to Rs 15,000. A sum of Rs 75,000 crore was allocated for the scheme by the finance minister.

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The Budget also proposed to exempt tax on notional rent for unsold housing units for two years. The eligibility of the total income to avail the benefit has now been increased Rs 5 lakh from the earlier from Rs 3.5 lakh.

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.

"There is no change in that because this is an interim budget and it has been targeted that the small taxpayers, middle-class and lower middle-class taxpayers should have a certainty of their tax liability on April 1".

The tax proposals have evinced mixed reaction from tax experts.

With an eye on upcoming general elections, he also proposed to raise the standard deduction to Rs 50,000.

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