In the Interim Budget presented on 1st February 2019, the Indian government has announced changes in the income tax rules for the financial year 2019-2020. These tax deduction rules are effective from April’19 onwards.
Highlights
There is no change in the income tax slab rate for the financial year 2019-20 (AY 2020-21).
The standard deduction of Rs. 40,000 has hiked up to Rs. 50,000 for salaried people and pensioners.
Taxpayers with taxable income up to 5,00,000 get full rebate under Section 87A. Rebate has been raised from Rs. 2,500 to Rs. 12,500.
Under Section 23, Notional rent is not applicable to the second home. A person can declare two of such houses as self-occupied and need not offer any notional rent for taxation purposes.
Long term capital gain by selling one residential property to buy two residential properties once in a lifetime is now allowed under Section 54 exemption.
Free download Automated Income Tax Form 16 Part B for F.Y. 2019-20 [ This Excel Utility can prepare One by One Form 16 Part B in New Form 16 ]
TDS on interest from bank or post office deposits has been increased to Rs. 40,000, from the current limit of Rs. 10,000.
The threshold limit for the deduction of TDS in case of rent is increased to Rs. 2, 40,000 from the existing limit of Rs. 1,80,000.
Exemption limit for gratuity is increased from Rs. 20,00,000 to Rs. 30,00,000.
Standard Deduction
For middle-class salaried people and pensioners, it is a relief with the hike in the standard deduction from Rs. 40,000 to Rs. 50,000.
Earlier the standard deduction of Rs. 40,000 was proposed in Budget 2018, after replacing Rs. 15,000 and Rs. 19,200 as medical reimbursement and travel allowance. Now it has been hiked to Rs. 50,000 which means in AY 2020-21, all pensioners and salaried people would be eligible for a fixed deduction of fifty thousand.
Full Tax Rebate
The interim budget 2019 to provide a full tax rebate to individuals having a net taxable income up to Rs 5 lakh. The maximum tax rebate given under section 87A is increased from Rs. 2,500 to Rs. 12,500. Individuals taxable earning up to Rs. 5 lakh would pay zero tax.
TDS on Deposits
The higher limit on TDS (tax deducted at source) on interest from deposits held with bank or post office is increased to Rs. 40,000, from the current limit of Rs. 10,000. It means interest income on bank/post office deposits up to Rs. 40,000 will not be subject to TDS.
Deduction Under 80TTA
Under section 80TTA (interest on saving account only), deduction remains the same up to Rs. 10,000 for individuals and HUF (Hindu Undivided Family) except for senior citizens.
Tax Benefits for Senior Citizens
Under section 80TTB (interest on all kinds of deposits held in banks, cooperative banks and post offices) has been raised from Rs. 10,000 to Rs. 50,000 for all senior citizens over 60 years.
Tax Deduction Under 87A for Taxpayers Earning Below Rs 5 lakh
Standard Deduction of Rs. 50,000 and Rs. 12,500 rebates will help middle-class salaried taxpayers to wave off their tax. Take examples to understand this:
If the individual shows savings of worth Rs. 1.50 lakh under section 80C, net taxable income becomes 5 lakh.
The income tax calculates to be 12,500. As per the change in 87A, an individual gets rebate of Rs. 12,500 on income up to 5 lakh, thus taxpayer will be liable to pay zero tax.
Download All in One TDS on Salary for West Bengal Govt Employees for the F.Y. 2019-20 and A.Y.2020-21 along with the effect by the 6th Pay Commission ROPA-2019
The feature of this Excel Utility is the following:-
1) This Excel Utility can prepare automatic Tax Calculation as per new Finance Budget 2019
2) The Salary Structure as per the New West Bengal Govt employee’s Salary Pattern, as per ROPA 2019
3) Automated Individually Salary Sheet for each Employee
4) Automated Income Tax Salary Sheet for each Employee
5) This Excel Utility calculate your House Rent Exemption Calculation U/s 10(13A)
6) Automated Income Tax Form 16 Part A&B for F.Y. 2019-20 in New Format
7) Automated Income Tax Form 16 Part B for the F.Y. 2019-20 in New Format
8) Automated H.R.A. Exemption Calculation U/s 10(13A)
