Most income taxpayers were seeking more tax exemptions, which in turn would have boosted savings, consumption and investment.
The finance minister has given a major relief to the salaried class, as individuals drawing a salary of up to Rs 12 lakh may not have to pay any tax if all exemptions are availed.
The Budget has provided for tax deductions for those buying homes under the affordable housing scheme.
There is an additional deduction of Rs 1,50,000 on interest on home loans for affordable houses up to Rs 45 lakh till March 31, 2020. This is over and above the existing available deduction of Rs 2,00,000.
This means that those in the 30% tax bracket will avail tax incentives of up to Rs 45,000 while those in the 20% and 10% brackets can seek relief up to Rs 30,000 and Rs 15,000, respectively.
Furthermore, GST rates on electric vehicles have been lowered from 12% to 5%.
Income up to Rs 12 lakh Avail all deductions and you may not have to pay any tax
There’s an additional income tax deduction of Rs 1.5 lakh on interest on loans taken to buy the vehicle, if the owner had no other electric vehicle while making the purchase.
A lump sum withdrawal to the extent of 60% from the National Pension Scheme (NPS) is also exempt from tax.
Most income taxpayers were seeking more tax exemptions, which in turn would have boosted savings, consumption and investment.
However, contrary to the expectations of the common man, the finance ministry did not tinker much with tax slabs and rates, barring an additional surcharge of 3% for people with taxable incomes between Rs 2 crore and Rs 5 crore, and 7% for those with incomes beyond Rs 5 crore.
There is no income tax up to Rs 5 lakh, something the common man can continue to rejoice in.
“This is a major relief to the middle class, as they can focus on savings and investments. Earlier, tax deduction on home loan interest was limited to Rs 2 lakh. This has been raised to Rs 3.5 lakh for property valued up to Rs 45 lakh, boosting the affordable housing space,” said CS Sudheer, founder and chief executive officer, IndianMoney.com.
In another friendly move, taxpayers can choose between PAN card and Aadhaar card to file their income tax returns. This means that those people who do not have a PAN card can now use their Aadhaar number.
Also, to ease the income tax returns filing process, pre-filled ITRs would be made available to taxpayers by collecting and collating the information available from banks, stock exchanges, mutual funds, and so on.
Social Stock Exchange
- An electronic fund-raising platform for listing social enterprises and voluntary organisations is proposed
- This would help the groups raise capital as equity, debt or as units like mutual funds
- Allowing listing of social enterprises can be a game changer for orgs trying to transform social dynamics
Focus On Savings
- Deduction of Rs 1,50,000 on interest on home loans for affordable houses up to Rs 45 lakh till March 31, 2020
- This deduction is over and above the existing available deduction of Rs 2,00,000
- Goods and Services Tax (GST) rates on electric vehicles have been lowered from 12% to 5%
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