Even though it was an interim budget in Feburary 2019, the then Finance Minister Piyush Goyal announced a few changes in the area of income tax for the salaried class.
Before Goyal's successor, Nirmala Sitharaman, announces her first Union Budget on Thursday, here's a brief overview on the relief provided to the salaried class in the interim budget.
No tax will be levied on those whose taxable income is less than ₹5 lakh.
Standard deduction increased to ₹50,000 from ₹40,000 for salaried class. This increase of ₹10,000 in standard deduction resulted in tax savings of ₹3,000 for individuals in the 30% tax bracket (excluding surcharge and cess).
Individuals with gross income up to ₹6.5 lakh will not need to pay any tax if they make investments in provident funds and prescribed equities.
TDS threshold for home rent increased from ₹1.8 lakh to 2.4 lakh.
The threshold on TDS on interest from bank or post office deposits has been increased to ₹40,000, from current limit of ₹10,000. This effectively means interest income on bank/post office deposits up to ₹40,000 will not be subject to TDS.
In the Budget, the finance minister proposed exemption from notional rent in respect of two self-occupied house properties. Currently, if a person has two properties which are self-occupied, deemed rent from one of the house properties is taxable. The finance minister also proposed to extend the one-time benefit of capital gains exemption on reinvestment in two house properties. This benefit will apply where capital gains are ₹2 crore or less. Currently, the exemption is applicable only against one house property.
Also, Income tax relief on notional rent from unsold houses has been extended to two years from one year.