05 Feb Brief Analysis of Interim Budget 2019
- Section 87A rebate has been increased to Rs. 12,500 effectively making the income exempt upto an Amount of Rs. 5 Lacs for Individuals. There is no change in the basic slabs, hence for an individual having Total income of more than Rs. 5 Lacs, there is no change in Tax Slabs. (Section 87A).
- Other Tax Slabs and Surcharge and Cess would remain same.
- Standard Deduction from Salary Income increased from Rs. 40,000 to Rs. 50,000. The standard deduction was introduced in last year to replace the Conveyance and Medical Allowance. (Section 16).
- Now Annual Value of two self occupied house properties can be taken as Nil. The Deduction in respect of interest on Home Loan would be allowed for both of the house properties subject to the aggregate limit of Interest. It is pertinent to note that Nil value is applicable only if both the house properties are self occupied. If the person has let out the other property, then there is no change in taxation. (Section 24).
- One Time opportunity to claim the deduction u/s 54 of Income Tax Act against the capital gain arising by sale of House Property by purchasing two House Properties. This deduction would be applicable only if the long term capital gain is upto Rs. 2 Crores. The existing provisions allows only purchase of one house property for claiming deduction u/s 54.
- One Year extra time allowed (upto 31st March 2020) for obtaining approval of Housing Project for availing deduction u/s 80-IBA of Income Tax Act.
- Threshold limit for deduction of TDS u/s 194A increased to Rs. 40,000 only if the Interest is paid by Banking Company, Co-operative Society or Post Office.
- Threshold limit for deduction of TDS u/s 194I (Rent) has been increased to Rs. 2.40 Lacs from existing Rs. 1.80 Lacs.
- One year waiver given to Builders from the taxing of notional income from unsold House Property after completion of project. Now the income would not be taxable for two years from the date of completion of Project.
- Time limit for the attachment to remain valid during the period of investigation has been increased to 365 days from existing 90 days. (Section 8(2) of Prevention of Money Laundering Act, 2002)
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