The Modi
government delivered an impactful budget today, just before the elections,
showering multiple benefits to the Tax Paying Citizens. Key benefits are as
under:
Tax
Rebate:The government has proposed to introduce full tax
rebate for individuals earning up to 5lacs. With Tax saving investments
included, the tax rebate extends to income till 7.25lacs. (includes 1.50lacs
under section 80C, 50k in NPS, 25k in health insurance)
Higher Standard Deduction Limit:
Salaried individuals can claim standard deduction of up to 50k, up from 40k
earlier.
TDS Relief (Bank Interest): There
will be no TDS on interest earned up to 40k from savings bank account and post
office savings schemes, which was earlier at 10k.
TDS
Relief on Rent Raised: There will be no TDS to be deducted on rental income
of up to 2.40lacs per annum, increased from 1.8lacs earlier.
No Income Tax on Notional rent:
So far, if an individual owned a second house, even if his house is vacant, he
had to pay income tax on notional rent (i.e. market value of rent of the
property in a particular location). However, individuals having unoccupied
second house will now, not be required to pay tax on such a property.
Higher Tax Free Gratuity: The government has proposed to double the approved ceiling limit for tax free gratuity pay-outs from 10lacs to 20lacs.
Amending Section 54EC: Individuals can now invest up to 2crores in two residential properties under Section 54EC. At present, Section 54EC of the Income Tax Act lists the cases in which capital gains tax from long- term assets (held for more than three years) need not be charged if the gains are up to 1crore and are invested in certain specified areas.
