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Important Changes in Income Tax Act Applicable from 1st April 2019

Important Changes in Income Tax Act

The Interim Budget 2019 has brought a sigh of relief to the common men due to some important announcements pertaining to tax relief. These amendments are applicable from FY 2019-20 starting from 1st April 2019. The corresponding Assessment Year for the same is 2020-21. Let us take a quick look at the important changes in Income Tax rules from a personal tax perspective.

Standard Deduction in Salary:

  • In previous budget standard deduction of Rs. 40,000 from salary / pension was introduced in lieu of exemption for medical reimbursement and conveyance allowance.
  • In the Interim Budget 2019, the same has been increased to Rs. 50,000 from current 40,000.

 

No Deemed Rental Income on having Two Residential House Properties:

  • Home-owners will not be required to pay tax on notional rent if they have more than one self-occupied property.
  • According to the budget proposals, exemption has been proposed on the income tax from the notional rent on second -self-occupied house.
  • However, there is no change in aggregate limit for deduction in respect of interest on housing loan. The aggregate deduction for interest on housing loan for both houses cannot exceed Rs. 30000 or Rs. 2,00,000.

 

Rebate under section 87A:

  • Individual taxpayers with annual income up to Rs. 5 lakh rupees will get full tax rebate.
  • The income limit eligible to avail tax rebate under section 87A have been raised to Rs. 5 lakh from Rs. 3.5 lakh.
  • The limit of tax rebate under section 87A increased to Rs. 12,500.00 from Rs. 2,500.00.

 

Section 54 Relied extended to 2 Residential Houses:

  • Individual or HUF will be able to claim Long Term Capital Gains (Capital gain on Sale of Residential House) exemption benefit where sales Proceeds are invested in purchase of Two Residential House but subject to following Conditions.
    • The long-term capital gains from sale of such house property shall not exceed Rs 2 crore, and
    • The benefit can be claimed only once in the taxpayer’s lifetime.

 

Increase in Threshold Limit of TDS on Interest earned on Bank / Post office deposits:

  • Depositors have been given some relief in the Union Budget 2019, which proposed to increase the TDS threshold on interest earned on the deposits with banks and post office to Rs 40,000.
  • The Budget tabled before the Parliament on Friday calls for quadrupling the TDS limit on interest from deposits from Rs 10,000 to Rs 40,000.
  • In case of senior citizens, the limit has been increased to Rs 50,000.
  • The proposal will cover interest earned on savings deposits, fixed deposits, as well as other deposit schemes in banks and post offices.

 

Read more income tax related updates and blogs here.

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