As per the Budget 2019 proposals, annual income up to Rs 5 lakh has now been made tax-free. However, if planned properly, one can now earn tax-free income up to Rs 10 lakh!
The Interim Budget 2019 has introduced various sops for the salaried taxpayers which can be availed in the Financial Year 2019-20. As per the budget proposals, annual income up to Rs 5 lakh has now been made tax-free. However, very few people are aware of this fact that if someone plans his tax affairs smartly, then he can earn a tax-free income up to Rs 10 lakh!
Further, if a person possesses two house properties and he is upset due to paying taxes on notional rent, as the second home is deemed to be let out by the Income-Tax Act, the Union Budget 2019 has also proposed 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 taxable salary income of Rs 10 lakh both in the Financial Year 2018-19 and 2019-20. She has two houses — one in Delhi and another in her home town Jaipur — but she stays in her Delhi house. She has to assume that one of the houses is deemed let-out (at Rs 30,000 per month) as the Income-Tax Act allows a taxpayer to assume only one house as his/her self-occupied house property. If she plans with a little care, after considering the proposals made in the Interim Budget, she can eventually reduce the tax liability on her total income to almost nil.
(Here Section 80CCD refers to Section 80CCD (1B))
(By CA Naveen Wadhwa, DGM, Taxmann.com, and CA Ritu Gupta, Assistant Manager, Taxmann.com)