Finance Minister Piyush Goyal on Friday doled out tax sops to middle class including doubling of income tax exemption limit to ₹ 5 lakh, raising standard deduction to ₹ 50,000 and provided concessions on interest income from bank deposits and rent.
“Individuals with income up to ₹ 5 lakh will not be required to pay any tax,” Goyal said while presenting Interim Budget for 2019-20 in Lok Sabha.
He said with this, individuals who are earning gross income of ₹ 6.5 lakh per year and have made investments in savings instruments, will be exempt from paying income tax.
“This will provide benefit of ₹ 18,500 crore to 3 crore middle class taxpayers self employed, senior citizens,” he said, adding the number of beneficiaries will go up for those who have made investments in mediclaim and pension.
No tax will be deducted on interest earned on bank and post office deposits of up to ₹ 40,000 annually, up from ₹ 10,000 currently.
The Budget also proposed to exempt tax on notional rent for unsold housing units for two years.
Capital gains tax
Goyal also proposed that benefit of rollover of capital tax gains be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains of up to ₹ 2 crore.
However, it can be exercised once in a lifetime, he added.
The Income Tax department will move towards faceless assessment and verification of returns, Goyal said on Friday.
Hike in standard deduction
Standard deduction has been raised from ₹ 40,000 to ₹ 50,000 which will benefit three crore salaried individuals.