The Interim Budget, 2019 introduced various sops for the salaried taxpayers which can be availed in the Financial Year 2019-20. If one plans his tax affairs smartly, he can earn tax-free income up to Rs. 10 lakhs. Further, if a person possesses two house and he is upset due to paying taxes on notional rent, as the second is deemed to be let-out by the Income-tax Act, this budget proposes some changes to cheer him up.
How this budget would impact your pocket, can be understood with the following scenario:
Ms. Shivi, a salaried class taxpayer, earns the taxable salary income of Rs. 10 lakhs both in Financial Year 2018-19 and 2019-20. She has two houses, in Delhi and in her home town Jaipur, but she stays in Delhi house. She has to assume that one of the houses is deemed let-out (at Rs. 30,000 per month) as Income-tax Act allows a taxpayer to assume only one house as his/her self-occupied house property. If she plans with little care, after considering the proposals made in Interim Budget, she can eventually reduce the tax on her total income as low as nil.
| Particulars | Tax liability
(Pre-Budget) |
Tax liability
(Post-Budget) |
| Income under the head Salary
Less: Standard deduction Net Salary |
10,00,000
40,000 9,60,000 |
10,00,000
50,000 9,50,000 |
| Income under the head house property:
Notional rent Less: a) Statutory deduction at 30% b) Interest Net income/loss |
3,60,000
(1,08,000) (2,00,000) 52,000 |
–
– (2,00,000) (2,00,000) |
| Gross total Income | 10,12,000 | 7,50,000 |
| Less: Deductions under chapter VI-A
a) Section 80C b) Section 80D c) Section 80CCD |
(1,50,000) (50,000) (50,000) |
(1,50,000) (50,000) (50,000) |
| Total Income | 7,62,000 | 5,00,000 |
| Gross Tax | 64,900 | 12,500 |
| Less: Rebate under section 87A | – | 12,500 |
| Net tax payable | 64,900 | Nil |
| Health & education cess | 2,596 | Nil |
| Total tax payable | 67,496 | Nil |
