Modi government has pronounced 7 major reforms in Income Tax for the benefit of the middle-class taxpayers. These are as under –
1. Complete tax rebate u/s 87A has been announced to those earning annual taxable income upto Rs 5,00,000
2. No tax to those having gross income till Rs. 6.5 lakh if the investment has been made in specified savings. i.e. after availing the benefit of section 80C of Rs 1.5 lakh a person can save complete tax on the Gross income upto Rs 6,50,000.
3. Standard Deduction has been increased from Rs 40,000 to Rs 50,000.
4. Interim Budget 2019 has brought a radical increase in the limits of TDS on interest on saving bank and post office. From the existing interest deduction of Rs 10,000, the limits have manifolded 4 times to Rs 40,000. This has been done to promote savings by non-working women and small deposit holders.
5. TDS on rent is deducted if the annual rent receipts in the year exceeded Rs 1,80,000 but now the limit has been increased to Rs 2,40,000.
6. Under Section 54 now investment to save capital gain upto Rs 2Cr be made in two house properties. The benefit can be availed once in a life time by the taxpayer.
7. Also, tax on Notional rent was previously charged if a person had more than one self-occupied property but now the same would not be taxable for 2 self-occupied properties.