Finance Bill 2019

1. Basic exemption & Rebates: No changes have been proposed in either the basic exemption limit or the tax rates. Therefore, the highest marginal tax rate of 35.88% as currently applicable would prevail.But resident individuals with taxable income of  Five  lakhs or below can claim a tax rebate ( Rs 12,500) in respect of the entire tax liability.

2.Salaried individuals - Standard deduction from taxable salary is proposed to be increased by INR 10,000/-. This will reduce the tax impact for all salaried taxpayers marginally.

3.House owners benefit from claiming second self-occupied house as non-taxable – Currently, a taxpayer can only treat one of his house properties as self-occupied and has to offer a notional rent to tax on a second house even if no rental income is derived. It is proposed that income need not be offered to tax in respect of a maximum of two houses that are occupied by the tax payer / on behalf of the tax payer. The overall tax deduction in respect of the interest paid on housing loans in respect of both properties would be capped to Rs 2 lakhs  per fiscal year.

4. More flexibility to house owners to avail tax exemption from Capital Gain – Capital gains from the sale a house property held for more than 24 months, is currently exempt from tax only if re-invested in another house property. It is proposed to permit this exemption even if re-invested in two properties. But this flexibility is allowed only once in the taxpayers lifetime and will apply only if the capital gain sought to be claimed exempt does not exceed 2 crores.

5.TDS provisions eased -

a. on bank / post office deposits – It is proposed that interest earned from deposits with banks, post-office and co-operative societies would not attract tax deduction at source where the interest does not exceed INR 40,000 per year (currently INR 10,000 per year).

b. on rental payments by specified taxpayers – It is proposed that tax deduction at source would apply only where the rent payable during the fiscal year exceeds INR 2.4 Lakhs (current limit INR 1.8 Lakhs)