Budget 2019 Tax Updates | Highlights For Taxpayers

Budget 2019 tax update

Table of Contents

Being the last budget of the present government, The budget 2019 had been much talked about. All the sections of the society had been looking forward to the changes that the government has to bring in. This budget has included everyone and has been focused on improving the condition of the financial condition of the middle class. There have been amendments in the Income Tax Act 1961 and Goods and Services tax along with changes in many other areas as well.

With the raising of the standard tax deduction for people who had made investments in savings, which constitute around 90% of the middle-class taxpayers, around 3 crore middle taxpayers will be affected. Also, this budget provides relief to the renting house owners and exemptions raised for self-occupied house property.

Interim Union budget has unveiled by Mr. Piyush Goyal on 1st February, 2019 in Lok Sabha. Various reliefs were expected by general public in Income tax to increase their disposal income such as increase in basic exemption threshold limit, increase in maximum limit of deduction u/s 80C, increase in standard deduction for salaried class persons etc.


This article provides you with an insight into the rebate that everyone has been talking about.

Key amendments recommended in Income Tax Act, 1961 are:

Net taxable Income up to INR 5,00,000 will be chargeable to NIL Income tax as deduction u/s 87A has increased from INR 2,500 to INR 12,500 if total income doesn’t exceed INR 5,00,000. (Section 87A of IT Act)

Impact of amendment
Net Taxable Income 5,00,000 5,10,000
Income Tax:
Upto INR 2,50,000 NIL NIL
Above 2,50,000 to 5,00,000 12,500 12,500
Above 5,00,000 to 10,00,000 2,000
Above 10,00,000
Total Tax 12,500 14,500
Less: Rebate u/s 87A 12,500
Net Tax Payable NIL 14,500
Add: Cess NIL 580
Total Tax payable NIL 15,080
Net Saving 12,500 NIL

Standard Deduction under head salary has increased from INR 40,000 to INR 50,000 (Section 16 of IT Act)

  • Exemption for self-occupied house property increased from one house to 2 houses.  However, deduction for interest under section 24 is limited to INR 2,00,000 for both houses (Section 23 and 24 of IT Act)
  • Long term capital gain on transfer of residential house property can be claimed as exempted by making further investment in two residential house properties provided capital gain income is upto INR 2 Crores. Earlier, exemption was available on investment in one residential house only.

Revised threshold limit for deduction of TDS:For the purpose of claiming 100% deduction u/s 80-IBA of profits and gains derived from business of developing and building housing projects, time limit for obtaining approval of housing projects has extended from 31st March, 2019 to 31st March, 2020. (Section 80-IBA of IT Act)

Section Nature of Payment Earlier Threshold Limit Revised Threshold Limit Payer
194A Interest other than “Interest on Securities” 10,000 40,000 Banking Company

Co-operative society

Post Office

194-I Rent 180000 240000 Any person, not being an individual or a Hindu undivided family
    • Within the next 2 years, almost all assessment and verification of IT returns will be done electronically.

Key Amendment and achievements in GST:

  • Business with less than INR 5 Crores of turnover will be allowed to file quarterly returns. Such taxpayers comprise of over 90% of total taxpayers.
  • GST rates have continuously reduced over the period of time. Most of the daily use items are taxable @ 0-5% rate.

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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