Key Highlights of Union Budget 2019: Impact to Salaried Class

 

The Union Budget of 2019 looks in favour of the salaried class this time. Piyush Goyal is appointed as the interim finance minister because Arun Jaitley is undergoing treatment in the United States. On one hand, Piyush Goyal proposed to increase Standard Deduction of Rs 50,000/- which will be deducted from taxable income of employees which is an advantage to the salaried class. On the other hand, there is no change in the Tax slab, however the rebate u/s 87A is been changed to Rs.12,500/- from existing Rs.2500/-

Here are the Key Changes introduced by the Budget 2019 –

1. No change in Income Tax slabs rates

The Modi Government in the past years has made positive changes with respect to income tax for the salaried class. However, this year’s Budget again has made no changes in the Income Tax slab rates.

2. Proposal to Increase Standard Deduction

The Union Budget 2019 has proposed to increase Standard Deduction to Rs 50,000 from existing Rs. 40,000. Standard deduction is a flat amount that is subtracted from income before calculation of taxable income.

3. Proposal to Increase Income Limit for Rebate u/s 87A

The budget 2019 has proposed to increase Section 87A rebate taxable income limit to Rs 5 lakh from existing Rs 3.5 lakh. Earlier for taxable income up to Rs. 3.5 lakh the rebate was limit to Rs 2,500/-, but under new proposal this limit will extend to Rs 12,500/-, this means for those employee whose taxable income is up to Rs 5 lakh need not require to pay any tax, but if the amount exceeds Rs 5 lakh then then existing 5% rate on slab Rs 2.5 lakh till Rs 5 lakh will be applicable.

4. Reduce in Income Tax process Time

The Budget 2019 has proposed to reduce Income Tax returns processing time to 24 hours from existing time which use to take upto 25 to 40 days.

5. Revoked Tax on ‘Notional Rent Income’

Give up tax on ‘Notional Rent Income’ on Deemed-to-be-let-out property if employee hold 2 house property.

For a more comprehensive understanding of the Key Highlights, here’s a tabular representation of all the changes made.-