Union Budget 2019: Richest to pay more tax, tax rebate for affordable housing loans

Budget 2019 New Income Tax Slab, Rates Changes: Nirmala Sitharaman announced that the surcharge on those earning between Rs 2 crore and Rs 5 crore and above that has been increased to 3% and 7%, respectively.

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The Union Budget was presented by Finance Minister Nirmala Sitharaman on Friday.

Income Tax Slab, Rates Changes: Union Finance Minister Nirmala Sitharaman on Monday announced a TDS (tax deducted at source) of 2 per cent on cash withdrawal of more than Rs 1 crore from a bank account in a bid to curb the money transactions by companies. While presenting her maiden Union Budget for the financial year 2019-20, Sitharaman did not announce any changes in the income tax slabs, she did increase the surcharge on those earning between Rs 2 crore and Rs 5 crore and above to of 3 per cent and 7 per cent, respectively.

A tax subsidy of Rs 1.5 lakh was also announced for taxpayers taking loans to buy electric vehicles. An additional Rs 1.5 lakh deduction has been proposed on interest paid for affordable housing loans of up to Rs 45 lakh availed before March 2020.

Besides this, the minister also announced a phased reduction in rates of corporate tax. Companies having annual turnover of Rs 400 crore, she said, will be required to pay 25 per cent of their income as tax. This, she added, will benefit 99.3 per cent of companies. According to the Finance Minister, Direct Tax revenue has significantly increased in the last few years — she announced a 78 per cent jump.

Another significant announcement was that for filing income tax returns, Aadhaar card and PAN card will now be interchangeable.

Prior to the recent Lok Sabha elections, the Modi government had released an interim budget, which came into effect on April 1 this year. The then Finance Minister Piyush Goyal, in his debut Budget, proposed that individual taxpayers having taxable annual income up to Rs 5 lakh will get full tax rebate and therefore will not be required to pay any income tax. For salaried persons, Standard Deduction was raised from the current Rs 40,000 to Rs 50,000 with the aim to provide additional tax benefit of Rs 4,700 crore to more than three crore salary earners and pensioners. To address the growing disquiet over jobs, Goyal announced a string of incentives not just for builders, but also home buyers, to boost demand in a sector that could be a force multiplier for the economy. He further proposed to exempt levy of income tax on notional rent on a second self-occupied house.

This is the first budget which was presented under the Narendra Modi 2.0 government after it was re-elected to power following the landslide victory in the 2019 Lok Sabha elections.