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Business News/ Money / Nine years of Narendra Modi government: How income tax rules changed in this period
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Nine years of Narendra Modi government: How income tax rules changed in this period

A look at major changes in income tax rules under PM Narendra Modi's nine-year regime

Nine years of Modi government: Several changes have been incorporated in income tax rules during the last 9 years. (Mint)Premium
Nine years of Modi government: Several changes have been incorporated in income tax rules during the last 9 years. (Mint)

Ever since the Narendra Modi government first came to power in 2014, several changes have been incorporated in income tax rules during the last nine years. On May 30, the central government led by Prime Minister Narendra Modi will complete nine years of tenure. A look at major changes in income tax rules under PM Narendra Modi's nine-year regime.

Changes in income tax rules under PM Modi in 2014

After an overwhelming mandate in the Lok Sabha elections, the late Arun Jaitley presented his first Union Budget where he raised the personal income tax exemption limit from 2 lakh to 2.5 lakh. For senior citizens, the exemption limit was increased from 2.5 lakh to 3 lakh. The limit for deduction under Section 80C was increased to Rs1.5 lakh from 1 lakh while deduction limits for interest on home loan was increased to 2 lakh from 1.5 lakh.

Also read: Nine years of Modi government: Nifty, Sensex surge 150%, market-cap grows over three-fold

Changes in income tax rules under PM Modi in 2015

-The deduction limit on health insurance premiums was raised from 15,000 to 25,000 for the general public

-The deduction limit on health insurance premiums was increased to 30,000 from 20,000 for senior citizens. 

-The transport allowance exemption was also increased from 800 to 1,600 per month.

-An additional deduction of 50,000 for contribution under the National Pension Scheme (NPS) under Section 80 CCD.

-Surcharge for income above 1 crore was increased to 12% from 10%.

-Wealth tax was abolished

-An additional surcharge of 2% on the super-rich who had a taxable income of more than 1 crore.

Changes in income tax rules under PM Modi in 2016

-The tax rebate was raised from 2,000 to 5,000 for those with income not exceeding 5 lakh per annum under Section 87A. 

-The limit of deduction on rent paid under Section 80GG was also raised from 24,000 per year to 60,000 per year.

-Surcharge for income above 1 crore was increased to 15% from 12%.

-The budget also imposed a 10% income tax on dividends in excess of 10 lakh annually.

Also Read: Nifty, Sensex surge 150%, market-cap grows over three-fold in Modi government’s nine-year stint

Changes in income tax rules under PM Modi in 2017

-The tax rate was reduced from 10% to 5% in the 2.5 lakh - 5 lakh bracket. 

-The finance minister also reduced the tax rebate under Section 87A from 5,000 to 2,500, applicable to those taxpayers whose annual income is up to 3.5 lakh.

-A surcharge of 10% was introduced on those with annual taxable income between 50 lakh and 1 crore.

Changes in income tax rules under PM Modi in 2018 

 -A standard deduction of 40,000 in lieu of current exemption in transport allowance and reimbursement of miscellaneous medical expenses

-Deduction for medical expenditure was raised to 50,000 from 30,000 for senior citizens.

-Deduction for interest income earned on deposits with banks, and post offices were increased to 50,000 from 10,000 in the case of senior citizens, along with an exemption from the deduction for tax for interest income up to 50,000. 

-The decision to tax long-term capital gains exceeding 1 lakh at the rate of 10% without allowing the benefit of any indexation.

Changes in income tax rules under PM Modi in 2019

-In an election year, the interim budget brought good news for the middle class. Those earning less than 5 lakh ended up paying zero tax.

-The standard deduction was also increased to 50,000 from 40,000 for the salaried class.

Changes in income tax rules under PM Modi in 2020

The government introduced new slabs. The new tax regime was optional and the taxpayers were given the choice to either remain in the old regime with exemptions and deductions or opt for the new reduced tax rate without those exemptions.

New tax slabs were announced in Budget 2020. The taxpayers were given the choice to either remain in the old regime with exemptions and deductions or opt for the new reduced tax rate without those exemptions.

Zero tax for income up to 2.5 lakh

5% for income between 2.5 lakh and up to 5 lakh

10% for income between 5 lakh and up to 7.5 lakh

15% for income between 7.5 lakh and up to 10 lakh

20% for income between 10 lakh up to 12.5 lakh

25% for income between 12.5 lakh and up to 15 lakh

30% for income above 15 lakh.

-Dividends received from mutual funds and domestic companies are to be taxed at the recipient's hands.

-If the employer's contribution exceeds 7.5 lakh in a year towards NPS, superannuation fund, and EPF, it will be taxable in the hands of the employee.

Changes in income tax rules under PM Modi in 2021

These include pre-filled income tax returns (ITR) forms, higher tax deduction at source (TDS) for non-filers of income tax returns, and exemption of dividend payment to REIT/ InvIT from TDS among others.

Changes in income tax rules under PM Modi in 2022

There were no changes in personal income tax slabs or rates. The government provided a one-time window to correct omissions in income tax returns (ITRs) filed. The Finance Minister announced a new tax rule for taxpayers where a taxpayer can file an updated return on payment of taxes within two years from the end of the relevant assessment year.

-30% tax on the proceeds of virtual/digital assets.

-The tax deduction limit for state government employees' contribution to NPS raised to 14% from 10%.

Changes in income tax rules under PM Modi in 2023

This year 2023, there were many changes in the income tax rules effective 1 April 2023. Changes in income tax slabs to tax rebate limit raised, No LTCG tax benefit on some debt mutual funds are some of the major changes effective from 1 April 2023.

-Extension of rebate for annual income up to 7 lakh, applicable to people under the new income tax regime.

-A standard deduction of 50,000 has also been introduced under the new income tax slab. 

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Published: 26 May 2023, 10:59 AM IST
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