Important changes in Budget 2019

Changes in Income Tax Rebate

Income Tax Rebate increased from 2500 to 12500 if Income between 250000-500000

Earlier

Income Tax Rebate was earlier available of max 2500 if Income between 250000-350000

Now

Income Tax Rebate is now available of max 12500 if Income between 250000-500000

** No changes in Income tax slab rate for F.Y 2019 -20 in this budget. Only rebate has been increased from 2500 to 12500 u/s 87A, if net total income is less then or up to Rs 500000

Example

Income Tax Rebate was earlier available of max 2500 if Income between 250000-350000

Now

Income Tax Rebate is now available of max 12500 if Income between 250000-500000

Standard Deduction Now 50000 for Salaried Employees (Earlier it was 40000)

Standard Deduction has been increased from 40,000 to 50,000 now

EARLIER

Standard Deduction of 40000 was available

No Tax for Salaried Tax Payers Claiming 80C If Income Up to 700000

(For Businessman, Limit Is 650000)

Change in TDS Cutoff

• Section 194I Limit increased from 180000 to 240000
• Section 194A Limit increased from 10000 to 40000

Section 194A TDS limit increased

Earlier

If Interest is upto 10000,No TDS.

Now

if Interest on FD is upto 40000,No TDS

(However for Interest on FD is upto 50000,then No TDS

TDS on Interest on FD/RD (Section 194A)

Section 194I TDS limit increased for Rent (Land and Building)

Income From House Property Will be 0 for Two (Earlier it was One) Self Occupied property

EARLIER

Suppose I Have 2 Houses Which Are Self-Occupied Gross Annual Value Of Only One House Can Be Nil For Second House ,We Will Calculate Income From House Property Taking Market Rent

Now

Suppose I Have 2 Houses Which Are Self-Occupied Gross Annual Value of both will Be Nil 

Example 1

Suppose i have 2 houses whose market rent is 10000 and 20000 pm

Both houses are self-occupied(it is not given on rent, I am staying in it)

To Claim Section 54 Deduction, Earlier we used to claim

Section 54 Exemption can be used for Purchase of 2 House Property

(Earlier it was 1 house Properties)

Section 54 exemption now available on the second house property, provided the capital gains is less than or equal to Rs. 2 crores – to be availed only once in a lifetime.

Example 1

This 10 Lacs I Have To Invest In Purchasing Property

If I Purchase This Property For 8 Lacs,I Used To Get Deduction Under Section 54 Of 8 Lacs

If I Purchased 2 Properties Of 6 Lacs And 2 Lacs,I Will Deduction For Only One Property

I will take deduction for property having higher value

But From F.Y 2019-20 Onward,I Can Get Deduction For Both House Property Purchases Of 6 Lacs And 2 Lacs

Note

This Is Applicable Only If Amount Of Capital Gain Is Upto 2 Crore Rupees

Example 2

I Purchase 2 Properties For 220 And 50 Lacs

Since capital gain is more than 200 lac, i take deduction for only one property

I Take Deduction To Either 220 Or 50 Lac

We Can Take Deduction Under Sec 54 For The Amount 220 Lac .

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