(GIST OF YOJANA) In the Finance Act, 2019 (Interim Budget) [AUGUST-2019]

(GIST OF YOJANA)  In the Finance Act, 2019 (Interim Budget)
[AUGUST-2019]

In the Finance Act, 2019 (Interim Budget)

•  Rebate of income-tax for taxable income up to Rs. 5 lakh: It is provided in the tax proposal that a resident individual having total taxable income up to Rs. 5 lakh shall
•  not be required to pay any income tax.
•  Further, with the deduction of up to Rs. 1.5 lakh available under Section 80C of the Act, an individual with income up to Rs. 6.5 lakh will not be required to pay any income-tax.
•  Deduction of up to Rs. 3.5 lakh (instead of Rs. 2 lakh earlier) on loan interest on purchasing an affordable house: An individual who has purchased a house after taking a loan also gets a deduction on interest payment on such loan up to Rs. 2 lakh. If an individual has purchased an affordable house after taking a loan, he will get a deduction of up to Rs. 3.5 lakh (instead of Rs. 2 lakh earlier) on interest payment on such loan.
•  Deduction of up to Rs. 1.5 lakh on loan interest on an electric vehicle: If an individual has purchased an electric vehicle after taking a loan, he will get a deduction of up to Rs. 1.5 lakh on interest payment on such loan.
•  Therefore, an individual with income up to Rs. 11.5 lakh, who is paying interest on housing loan taken to purchase an affordable house, on loan taken to purchase an electric vehicle and has made investments eligible for deduction under Section 80C will be not be required to pay any income-tax.
•  Increase in Standard Deduction for salaried taxpayers: The amount of standard deduction was increased from Rs. 40,000 to Rs. 50.000.
•  Exemption for the Second Self Occupied House: Exemption from levy of tax on notional rent of the second self occupied house provided.
•  Capital Gains Exemption for Second House: Exemption to capital sains up to Rs. 2 crore was provided for purchase/construction of two houses (instead of one house earlier).
•  Increase in Threshold Limits for Tax Deduction at Source (TDS): The threshold limits for TDS are increased as below:
•  Threshold limit for TDS on bank interest, etc. increased from Rs.10.000 to Rs. 40.000.
•  Threshold limit for TDS on rental income increased from Rs. 1.8 lakh to Rs. 2.4 lakh.

In the Finance (No. 2) Bill. 2019 (Main Budget)

•  Incentives for Purchase of Affordable House: Interest deduction on loan taken for purchase of an affordable house is proposed to be increased from the existing Rs. 2 lakh to Rs. 3.5 lakh.
•  Incentives for Purchase of Electric Vehicle: Interest deduction of Rs.1.5 lakh is proposed to be given on loan taken for purchase of an electric vehicle.
•  Interchangeability of PAN and Aadhaar: In order to enable an individual who does not have PAN to file return and carry out other transactions which require quoting of PAN. it is proposed that such individual can use Aadhaar in place of PAN.

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Incentives for NPS:

•  Various incentives proposed to be provided are (i) full exemption to the amount which can be withdrawn from NPS on closure of NPS account; (ii) enhanced deduction of 14 per cent on Central Government contribution to NPS; (iii) deduction under Section 80C on contribution made by Central Government employees to their Tier-11 NPS accounts.
•  TDS on Income Element only of Insurance Policy Payout: TDS on payout of taxable life insurance policies proposed to be on income element only, instead of on the gross amount.

Pre-filing of Income Tax Return:

•  It is proposed to widen the scope of thirdparty reporting for enabling prefilling of income-tax returns for ease of compliance to the taxpayer.
•  With India's vision of speedy growth and to serve people with higher human development index ratings. We do need a healthy tax policy which has moderate tax structure with maximised tax base, ease to comply, administrative transparency. nonadversarial tax regime, lowest tax litigation, online simple services and procedures, credible adjudication system and tax abuse prevention mechanism.
•  Also, the integrity and efficiency of the tax system should be highly credible in the eyes of taxpayers so that our tax administration motivates every resident to be a proud self-compliant contributor to the development of the country by being an honest taxpayer. The tax administration is gearing up to alter its taxation approach from enforcement to self-motivated voluntary compliance through technological means and tax incentives.

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