This is the election year and there was a fair bit of debate on what the 2019 Budget would look like — the build-up to February 1 had some expectations of tweaks and reliefs for the salaried tax payers especially the middle class.
The impact of major changes on personal income tax are set out below:
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Standard deduction: The limit of standard deduction has been enhanced from ₹40,000 to ₹50,000.
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Capital gains: The current laws provide the seller of a residential property with relief from capital gains tax, if the proceeds from the sale are used to acquire another residential property. The benefit of roll-over of capital gains has been proposed to be increased from investment in one residential house to two residential houses for a taxpayer having capital gains up to ₹2 crore. This benefit can be availed only once in a taxpayer’s lifetime.
There were other proposals on TDS on rent and interest as also reiteration of the digitisation of the tax assessment process to ensure seamless and smooth communication with the taxpayers. In keeping with expectations, the aam aadmi had something to cheer about.
( Uday Bhartia, senior tax professional,EY also contributed to the article. Views expressed are personal)