Finance Minister Nirmala Sitharaman proposed an additional Rs 1.5 lakh deduction on interest paid for affordable housing loans till March 2020 to provide further impetus to affordable housing in the Union Budget 2019-20. With this, buyers of houses up to Rs 45 lakh will get an interest deduction of Rs 3.5 lakh. Sitharaman also proposed an additional income tax deduction of Rs 1.5 lakh on interest paid on loans for the purchase of electric vehicles (EVs).
The finance minister raised surcharge on individuals having taxable income over Rs 2 crore till Rs 5 crore. This will have an effective income tax increase of 3 percent for those earning Rs 2-5 crore.
While announcing the Interim Budget on 1 February then finance minister Piyush Goyal had said that individual taxpayers having a taxable annual income up to Rs 5 lakh will get full tax rebate and therefore will not be required to pay any income tax. Also, investment of Rs 1.50 lakh in provident funds, specified savings, life insurance etc, will be eligible for an income tax deduction. Thus income up to Rs 6.5 lakh will become tax-free.
The former finance minister also hiked standard deduction for salaried employees from Rs 40,000 to Rs 50,000. The TDS threshold also hiked from Rs 10,000 to Rs 40,000 on bank and post office deposits. This will benefit senior citizens and middle-class taxpayers a lot.
If you are still confused as to how much tax you need to pay next year, here is a simple tax calculator designed by us. Check it out:
Please note that figures displayed above are approximate.