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Budget 2019: Buying an affordable house, electric car? No tax to be paid on gross salary of up to Rs 13.25 lakh

Union Budget 2019: On purchase of an affordable house, along with deduction of Rs 2 lakh on payment of home loan interest, you would get additional deduction of Rs 1.5 lakh.

Budget 2019, Union Budget 2019 India, income tax, income tax calculation, taxable income, tax rebate, affordable housing, electric vehicle, tax deductions, interest on home loan, auto loan
purchased an affordable house and an electric car this financial year or planning to buy so.
Budget 2019, Union Budget 2019 India, income tax, income tax calculation, taxable income, tax rebate, affordable housing, electric vehicle, tax deductions, interest on home loan, auto loan
Union Budget 2019 India: You may not have to pay any tax on gross salary of over Rs 13 lakh, if you have purchased an affordable house and an electric car this financial year or planning to buy so.

Union Budget 2019: Have you purchased an affordable house and an electric car this financial year or are planning to do so? The good news is that you may not have to pay any tax on gross salary of over Rs 13 lakh provided you fully utilise the benefits of tax-saving investments and take care of some provisions while purchasing the house and the electric vehicle.

On purchase of an affordable house, along with deduction of Rs 2 lakh on payment of home loan interest u/s 24 of Income Tax Act, you would get additional deduction of Rs 1.5 lakh under a new section, 80EEA, on the loan taken for residential house property from any financial institution subject to the following conditions:

(i) loan has been sanctioned by a financial institution during the period beginning the April 1, 2019 to March 31, 2020;
(ii) the stamp duty value of house property does not exceed Rs 45 lakh; and
(iii) you don’t own any residential house property on the date of sanction of loan.

So, by taking benefits of section 24 and section 80EEA together, you may get deduction up to Rs 3.5 lakh if you pay Rs 3.5 lakh or more interest on home loan.

However, to avail benefits u/s 80EEA, you should also be careful that the carpet area of the residential unit doesn’t exceed 60 square meter in metropolitan cities like Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region) or 90 square meter in cities or towns other than the above mentioned metropolitan cities.

Income Tax Calculator: Know post-Budget 2019 Income Tax out go here

Similarly, to avail another deduction of Rs 1.5 lakh u/s 80EEB on purchase of an electric vehicle, you have to fulfill the following conditions:
(i) the loan has been sanctioned by a financial institution including a non-banking financial company during the period beginning on the April 1, 2019 to March 31, 2023; and
(ii) you don’t own any other electric vehicle on the date of sanction of loan.

Apart from fulfilling the above conditions, you also have to take full advantage of tax-saving investments of Rs 1.5 lakh u/s 80C, take health insurance for your family by paying premium of Rs 25,000 or more and for your senior citizen parents with premium of Rs 50,000 or more, contribute Rs 50,000 or more to NPS and pay interest of Rs 3.5 lakh or more on home loan, in order to pay no tax on gross annual salary of Rs 13,25,000.

Assuming that a salaried assessee has no other income, let’s calculate how much tax has to be paid by the person.

Budget 2019, Union Budget 2019 India, income tax, income tax calculation, taxable income, tax rebate, affordable housing, electric vehicle, tax deductions, interest on home loan, auto loan
Union Budget 2019 India:Tax calculation.

Non salaried assessees, who don’t get the benefit of standard deduction, may end up paying no tax on gross income of Rs 12,75,000, provided above conditions are fulfilled.

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