Interim Budget 2019 of Modi Government will reduce your Tax Burden?
Budget 2019 - Modi Government
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Well, the 1st budget of Mr. Modi government was hailed as the sign of ‘acche din’. It gave a bonanza to tax-payers by increasing their basic exemption limit and the tax-deductions under section 80C. Although, the successive budgets have not been so generous with us. Whilst, there were some more deductions that have been offered to tax-payers; Budgets have also levied additional taxes, also, taken away some tax benefits.
When we talk about the 2015 Budget, for instance, it was not so friendly to the super-rich people. The surcharge of 10% on incomes above INR 1 crore was increased from 12% -15%. The succeeding year, a 10% surcharge was introduced for income between INR 50 lakhs and INR 1 crore. Not to miss, the final blow came last year in the form of 10% tax on LTCG from equity investments exceeding INR 1 lakh yearly.
At the same time, the Modi government abolished the wealth tax and strolled the deduction limit from INR 2000 – INR 5000 monthly falling under the section 80GG for those who don’t get House Rent Allowance (HRA).
With only a few hours left for the Interim Budget 2019, the expectations are on the favor of a ‘tax-friendly budget’. Rumors says that Modi government will try their level best to support middle-class tax-payers by offering amazing tax-benefits.
Increasing the basic exemption limit is a bit tricky. Apart from giving benefits to all tax-payers, but for the exchequer, it will lead to a tax loss. The estimation says that every INR 10,000 increase in the basic exemption leads to tax-loss of almost INR 2,000 crore for the exchequer. All we can say is – Good Luck!
- Basic tax exemption limit raised from INR 2 lakhs – INR 2.5 lakhs.
- Deduction limit under Section 80C raised from INR 1 lakh – INR 1.5 lakh.
- Deduction limit on a home loan raised from INR 1.5 lakh – INR 2 lakhs a year.
- The Additional deduction of INR 50,000 on contribution to the NPS.
- Sukanya Samriddhi Scheme made tax-free.
- Deduction on health insurance premium increased.
- Tax-free transport allowance limit hiked from INR 800 to INR 1,600 every month.
- Wealth tax was abolished
- Surcharge on individuals with income above INR 1 crore raised from 10% – 12%.
- Deduction for rent payers INR raised from INR 24,000 – INR 60,000.
- Tax rebate for taxpayers INR with income below INR 5 lakh raised from INR 2,000 – INR 5,000
- Additional exemption of INR 50,000 for new home buyers INR on loans up to
- Surcharge on income above INR 1 crore increased from 12% – 15%.
- The Tax rate for income between INR 2.5 lakhs and INR 5 lakhs reduced from 10% – 5%.
- The Tax rebate of INR 12,500 offered to all tax-payers INR.
- 10% surcharge introduced for incomes between INR 50 lakhs – INR 1 crore.
- The Standard deduction of INR 40,000 re-introduced for salaried individuals.
- Transport and medical allowances to be taxed.
- Increase in Cess from 3% – 4% for tax-payers INR
- 10% tax on LTCG from equities exceeding INR 1 lakh.
Looking forward to it – Modi Government…. The Budget Session 2019 awaits!
Credits for data: economic times