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Applicable Tax Rules After 2019 Budget – Highlights.
- No changes in the income tax slabs or the tax rates. (compared to last year)
- No Income Tax for gross taxable income up to 5,00,000.
- A tax rebate of Rs 12500 u/s 87A will be applicable to all tax payers whose taxable income is less than or equal to 5,00,000.
- The standard deduction for Salaried Employees has been hiked from Rs. 40,000 to 50,000.
- Section 80C rebates will remain at Rs. 1,50,000.
- Interest portion on home loan up to 2,00,000 will remain to get tax reliefs.
- TDS threshold on interest earned on bank/post office deposits will be raised from 10,000 to 40,000.
- TDS threshold for deduction of tax on rent will be increased from 1,80,000 to 2,40,000
- Rebates u/s 80D and rebates for handicapped dependants will remain.
As per the budget declaration, no tax will be levied if the taxable income is up to Rs. 5,00,000. But if the taxable income exceeds Rs 5 Lakh even by Rs. 1 you will have to pay tax applicable as per the existing slabs.
This trick happens due to the section 87A rebate which is applicable only when taxable income is less than or equal to Rs. 5,00,000.
In other words, The new exemption will become applicable if and only if you can keep your taxable income below 5 lakhs. As the famous saying goes, for all others there is really nothing new under the Sun.
Read an article on 7 ways to become a non-taxpayer and new proposed changes in the tax structure.