Changes in Income Tax in interim budget-2019
2. Nil value for 2nd self occupied house :Clause 4 of the Bill seeks to amend section 23 of the Income-tax Act so as to provide relief to the taxpayer by allowing him an option to claim nil annual value in respect of any two houses, declared as self-occupied, instead of one such house as currently provided. It further seeks to provide relief to the taxpayers that notional rent in respect of unsold inventory shall not be charged to tax up to two years, instead of existing one year, from the end of the financial year in which the certificate of completion is obtained from the competent authority.
3. No change in Interest amount for 2nd house as allowed as per sr no 2 above: Clause 5 of the Bill seeks to amend section 24 of the Income-tax Act to provide that the monetary limit of deduction on account of interest payable on borrowed capital shall continue to apply to the aggregate of the amounts of deduction in case of more than one self-occupied houses.
4.Two house can be purchased instead of One house in capital gain 54 section :Clause 6 of the Bill seeks to amend section 54 of the Income-tax Act so as to provide relief to the taxpayers having long-term capital gains up to two crore rupees, arising from transfer of a residential house, by affording the assessee a one time opportunity, at his option, to utilise the said amount for the purchase or construction of two residential houses in India instead of one residential house as currently provided.
5. Deduction for affordable house period extended Clause 7 of the Bill seeks to amend section 80-IBA of the Income-tax Act so as to augment the supply of affordable houses by extending the time limit from 31st March, 2019 to 31st March, 2020 for obtaining approval of the housing project for availing deduction. 15
6. Income up to Rs 500000 effectively exempted :Clause 8 of the Bill seeks to amend section 87A of the Income-tax Act to provide relief to the individual taxpayers by increasing the maximum amount of tax rebate to twelve thousand five hundred rupees from existing two thousand five hundred rupees. The tax rebate shall now be admissible to taxpayers having total income up to five hundred thousand rupees, instead of existing three hundred fifty thousand rupees.
7. Cut off limit increased 194AClause 9 of the Bill seeks to amend section 194A of the Income-tax Act so as to ease the burden of compliance by way of increasing the threshold limit from ten thousand rupees to forty thousand rupees, for deduction of tax at source on interest income, other than interest on securities, paid by a banking company, co-operative society or a post office.
8. Cut off limit increased 1941 :Clause 10 of the Bill seeks to amend section 194-I of the Income-tax Act to rationalise the threshold limit from one hundred and eighty thousand rupees to two hundred and forty thousand rupees, for deduction of tax at source on rental income.
9. Stamp duty related :Clauses 11 to 21 of the Bill seek to amend the Indian Stamp Act, 1899 for levy and administration of stamp duty on securities market instruments by the States at one place through one agency, viz., through Stock Exchanges or its Clearing Corporation or Depositories on one instrument, and for appropriately sharing the same with respective State Governments based on State of domicile of the ultimate buying client.
10. Attachment period increased for Money laundering Clause 22 of the Bill seeks to amend sub-section (3) of section 8 of the Prevention of Money-laundering Act, 2002 so as to extend the time limit of ninety days for which the attachment shall remain valid during the period of investigation to three hundred and sixty-five days and also to provide that in computing the period of three hundred and sixty-five days, the period during which the investigation is stayed by any court shall be excluded.
7. Cut off limit increased 194AClause 9 of the Bill seeks to amend section 194A of the Income-tax Act so as to ease the burden of compliance by way of increasing the threshold limit from ten thousand rupees to forty thousand rupees, for deduction of tax at source on interest income, other than interest on securities, paid by a banking company, co-operative society or a post office.
8. Cut off limit increased 1941 :Clause 10 of the Bill seeks to amend section 194-I of the Income-tax Act to rationalise the threshold limit from one hundred and eighty thousand rupees to two hundred and forty thousand rupees, for deduction of tax at source on rental income.
9. Stamp duty related :Clauses 11 to 21 of the Bill seek to amend the Indian Stamp Act, 1899 for levy and administration of stamp duty on securities market instruments by the States at one place through one agency, viz., through Stock Exchanges or its Clearing Corporation or Depositories on one instrument, and for appropriately sharing the same with respective State Governments based on State of domicile of the ultimate buying client.
10. Attachment period increased for Money laundering Clause 22 of the Bill seeks to amend sub-section (3) of section 8 of the Prevention of Money-laundering Act, 2002 so as to extend the time limit of ninety days for which the attachment shall remain valid during the period of investigation to three hundred and sixty-five days and also to provide that in computing the period of three hundred and sixty-five days, the period during which the investigation is stayed by any court shall be excluded.
Major Schemes
New Scheme- namely “Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)” to extend direct income support at the rate of Rs. 6,000 per year to farmer families, having cultivable land upto 2 hectares is announced.
While presenting the Interim Budget 2019-20, the Union Minister for Finance, Corporate Affairs, Railways & Coal, Shri Piyush Goyal said that “our Government is launching a historic programme PM-KISAN with an outlay of Rs.75,000 crore for the FY 2019-20 and Rs.20,000 crore in the Revised Estimates of FY 2018-19”.
Under this Government of India funded Scheme, Rs.2,000 each will be transferred to the bank accounts of around 12 crore Small and Marginal farmer families, in three equal installments. This programme would be made effective from 1st December 2018 and the first installment for the period upto31st March 2019 would be paid during this year itself, Shri Piyush Goyal said.
Tax Benefits
Individual taxpayers having taxable annual income up to Rs.5 lakhs will not be required to pay any income tax. The Finance Minister said that persons having gross income up to Rs. 6.50 lakhs are not required to pay any income tax if they make investments in provident funds, specified savings and insurance etc. Additional deductions such as interest on home loan up to Rs. 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance and medical expenditure on senior citizens etc, are also provided for in the Interim Budget 2019-20. Thus tax benefit of Rs. 18,500 crore is proposed to be provided to an estimated 3 crore middle class and small taxpayers comprising self employed, small business, small traders, salary earners, pensioners and senior citizens.
For salaried persons, Standard Deduction is being raised from the current Rs.40,000 to Rs.50,000. This will provide additional tax benefit of Rs. 4,700 crore to more than 3 crore salary earners and pensioners.
Exemption on levy of income tax on notional rent on a second self-occupied house is also now proposed. Currently, income tax on notional rent is payable if one has more than one self-occupied house.
TDS threshold on interest earned on bank/post office deposits is being raised from Rs. 10,000 to Rs.40,000.
TDS threshold for deduction of tax on rent is proposed to be increased from Rs. 1,80,000 to Rs.2,40,000 for providing relief to small taxpayers.