Union Finance Minister Piyush Goyal on Friday proposed to double the income tax exemption limit up to Rs 5 lakh. The announcement was made during Goyal’s speech in Parliament for Budget 2019.
The Budget was an interim one, as 2019 is an election year and the term of the Narendra Modi-led government ends in May. By convention, outgoing governments present an interim Budget of expenditure and receipts instead of a full one. This Budget was Piyush Goyal’s first as finance minister. Arun Jaitley, who presented the previous four Budgets of the Narendra Modi government, is away for medical treatment in the United States.
Goyal said people with gross income of up to Rs 6.5 lakh will be kept out of the tax bracket if they make investments in provident funds and prescribed equities.
The proposal will benefit more than three crore middle-class tax payers, Goyal said. The burden on the exchequer will increase by Rs 18,500 crore.
For salaried persons, the standard tax deduction is raised from Rs 40,000 to Rs 50,000, Goyal said. In Budget 2018, Finance Minister Arun Jaitley had introduced a standard deduction of Rs 40,000 for the salaried class.
The Centre has increased the threshold of tax deducted at source on rental income from Rs 1.8 lakh to Rs 2.4 lakh. The TDS on interest on fixed and postal deposits was also raised from Rs 10,000 to Rs 40,000.
The Union minister also said all Income Tax returns will be processed in 24 hours of filing, and the refunds will be issued simultaneously. All assessment will be done electronically, he added.