NEW DELHI: In the interim budget, finance minister Piyush Goyal has not changed the income tax slabs for the financial year 2019-20 but has provided relief to middle-class salaried taxpayers by rebates and increasing the standard deduction threshold.
Clause 8 of the Finance Bill introduced in parliament on Friday seeks to amend section 87A of the Income Tax Act to provide relief to individual taxpayers by allowing a rebate on annual income of up to ₹5 lakh.
For salaried persons, standard deduction has been raised from the current ₹40,000 to ₹50,000. This will provide an additional tax benefit of ₹4,700 crore to more than 3 crore salary earners and pensioners.
In the ongoing 2018-19, income up to ₹2.5 lakh is not taxable for individuals below the age of 60. Those above 60 years but less than 80 years enjoy a tax-free income of up to ₹3 lakh while for those above 80 the tax-free income goes up to ₹5 lakh.
According to the current slabs, if total income is more than ₹2.5 lakh but up to ₹5 lakh, then the total tax outgo is 5% of the amount by which the total income exceeds ₹2.5 lakh. For income between ₹5 lakh and ₹10 lakh, the tax outgo is 20% of the amount by which the total income exceeds ₹5 lakh plus ₹12,500.
In the 2019-20, a rebate has been given to only those who fall in the ₹5 lakh slab. Together with the increase in the standard deduction, the total tax saving is ₹13,520.
Income tax rates for individuals below 60 years:
Income tax rates for senior citizens: