Finance Minister Piyush Goyal on Friday announced full tax rebate to salaried class earning up to Rs 5 lakh from the current Rs 2.5 lakh, a move which is likely to provide relief in the face of rising cost of living and inflation.
Under new income tax slab, people who earn less than Rs 5 lakh annually, will get full tax rebate.
"Individuals with gross income up to Rs 6.5 lakh will not need to pay any income tax if they make investments in provident funds and prescribed equities," FM said.
Individual taxpayers having annual income upto Rs 5 lakhs will get full tax rebate. Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments in provident funds and prescribed equities :FM Piyush Goyal#Budget2019#BudgetForNewIndiapic.twitter.com/4LgxrCK9u3- PIB India (@PIB_India) February 1, 2019
It is to be noted that the basic exemption limit of salaried employee has not been raised from Rs 2.5 lakh to Rs 5 lakh. It is rebate under Section 87A which has been increased from Rs 2,500 to Rs 12,500. Adding to it, standard deduction has been increased to Rs 50,000 from Rs 40,000.
However, all individuals who are earning above Rs 5 lakh do not benefit from this budgetary announcement.
FM Goyal in his Budget speech also announced that benefits under Sec 80(i)BA has been extended for one more year, for all housing projects approved till end of 2019-2020.
In Modi government's first budget, the personal income tax exemption limit had been raised by Rs 50,000 to the current ceiling of Rs 2.5 lakh, resulting in tax saving of Rs 5,150 for all taxpayers.
Edited by Chitranjan Kumar