Finance minister Piyush Goyal touched many hearts with his expression of gratitude for taxpayers with well-chosen words that link taxes paid to the government’s spend on nation building. It must be acknowledged the budget was well presented—with a report card of the past and the promise of the future—with a vision to make India a $10 trillion-plus economy by the next decade.

The budget proposes to increase tax rebate of 2,500 to 12,500 for taxpayers whose net taxable income is up to 5 lakh, which means more than 30 million taxpayers will get out of the tax net. The budget also proposes to enhance standard deduction for all salary earners from the existing level of 40,000 to 50,000.

So, if you are a salaried individual who invests 1.5 lakh in Public Provident Fund, life insurance and other specified investments, and also pay medical insurance premiums ( 75,000) for self, family and parents (senior citizens) and make an additional National Pension System (NPS) contribution of 50,000, then even with a gross salary of 8.25 lakh, now, with the proposed increase in standard deduction and tax rebate, you will not pay any tax.

There is no change in tax rates and slabs. So, if your net taxable income exceeds 5 lakh, then you do not get the benefit of the proposed tax rebate.

A tax that has always pinched is the tax on notional income for property that is not let out. The budget has proposed no notional income to be computed for second house property owned and self-occupied by the taxpayer. Hopefully, this paves the way in the future for a full withdrawal of taxation on deemed income from house property that is not let out.

But remember that if there is interest on housing loans for both the properties, the deduction for interest on housing loans for both the self-occupied properties will remain capped at 2 lakh and there will be no loss to be carried forward.

Under the existing provisions, the second house property would have been taxed on notional income basis and unadjusted interest on housing loan of the second house would have resulted in a loss which could be carried forward and set off from rental income in future years. This is now no longer possible.

A beneficial change is proposed to be introduced in long-term capital gains (LTCG) tax exemption on sale of residential house property where capital gains are up to 2 crore. It is proposed that there will be no LTCG tax where such capital gains are invested to purchase two house properties. This benefit can be claimed only once in the lifetime of the taxpayer.

Other changes that are proposed and which would be helpful for taxpayers are around tax deduction at source (TDS). Now banks and post offices will deduct TDS only where interest income from deposits exceeds 40,000. This will reduce the burden on low-income earners. For senior citizens, this provision already existed.

An encouraging announcement was the proposal to usher in a simplified tax regime where all tax returns will be processed online within 24 hours and refunds issued simultaneously, tax assessments will be done electronically through anonymous back office run by tax experts with no personal interface between taxpayers and the tax office. This is really a vision of best-in-class tax administration.

A notable miss was the proposal for legislation of changes proposed in December 2018 on NPS for making withdrawals at ages 60 and above completely tax-free.

The build-up to the expectations from the budget ended with the finance minister presenting proposals that serve the needy and the middle class and yet spared the rich.

Sonu Iyer is tax partner and people advisory services leader, EY India

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