Financial Year 2019-20 has begun!!
April 2019 welcomes the beginning of the new financial year. What could be more interesting than taking a note of important tax provisions this very day!! Why to wait for the financial year to end and make tax planning a rush?? Let’s become a pro and know the 5 major tax changes pronounced in Interim Budget 2019.
Mr Piyush Goyal presented the interim budget 2019 and some distinguished tax amendments were made. In this blogpost we have briefed five must know tax changes affecting your planning for the Financial Year 2019-20.
Complete Tax Rebate on Income upto Rs 5,00,000
This is surely one of the most welcoming and talked about the announcement made in the latest interim budget. The modi government has given complete tax rebate to those earning annual taxable income upto Rs 5,00,000. But, here is a catch!! It is a tax rebate and not a tax deduction. Confused?? Let us help you in decoding the mystery. The said Tax Rebate under section 87A can only be availed if your income is up to the prescribed limit, Rs 5,00,000 for Financial Year 2019-20 (Assessment Year 2020-2021). The moment your income exceeds the threshold normal taxation on complete income earned shall levy.
Use this Income Tax Calculator to know your taxes payable.
Standard Deduction Limit Increased
A relief to the salaried tax[payers. The limit of standard deduction has been increased by Rs 10,000 for the Financial Year 2019-20. Yes, its time to celebrate it means the aggregate benefit under standard deduction will now be Rs 50,000 in lieu of previously existing Medical allowance of Rs 15,000 and rasnaport allowance of Rs 9,200 annually. To have a detailed understanding about standard deduction, its applicability etc Read More.
Limit for TDS on Interest Income Enhanced
Before Financial Year 2019-20 TDS on interest income earned from savings bank accounts or fixed deposits were deducted if the income exceeds Rs 10,000. But, from this year great relaxation has been provided to such earners. The limits for TDS deduction have increased four times. Yes, now those earning an annual income upto Rs 40,000 will not be liable for tax deduction and get the gross income in hands. Government has given this special benefit to promote savings by non working women and small deposit holders.
Changes in Capital Gains Tax
Capital Gains on House Property has witnessed following changes in interim budget 2019:
- Now once in a lifetime the taxpayer can avail the benefit of deduction under section 54 by investing upto Rs 2 Cr in two houses.
- Before financial Year 2019-20 tax was being charged on notional income from 2nd self occupied house property. But, now the government has announced that it will not be taxable for second property.
Threshold for deducting TDS on Rent Increased
No TDS on Rent receipts will now be deducted for annual rental amount upto Rs 2,40,000. Prior to Financial Year 2019-20, Assessment Year 2020-2021 this limit was upto Rs 1,80,000.
Since it is the beginning of the financial year it is even more important to understand the applicable tax provisions at this time. Taking an understanding on tax implications, tax reliefs and tax saving avenues helps in reducing burden on your pocket at the end of the year. Also, readers must remember that the above tax benefits will be available for the Financial Year 2019-20 i.e. should be used for tax planning in the running period. But, the same would be claimed in the income tax return to be filed by the due date of July 2020 for individuals.
To plan your taxes and file ITR, Contact the experts Now!!