This interim budget is a big tax bonanza for all salaried individuals!
For FY2019-20, It has been proposed that under section 87A, individuals with annual income up to Rs 5 lakh will get full tax rebate.
Following that, a reduction in tax rate from 10% to 5% for the tax slab of Rs 2.5 lakh to Rs 5 lakh is also introduced. Thus, Rs. 6.5 lakhs is not taxable.
This budget is also the main gain for pensioners as Standard Deduction is being raised from the current 40,000 to 50,000. This will provide an additional tax benefit of Rs. 4,700 crore to more than 3 crore salary.
Another relief of tax on those with two houses was earlier liable to pay income tax on deemed rent for their second house if it was not rented out/vacant.
In the year 2017, Jaitley cut off the tax rate for income between Rs 250,001 and Rs 5 lakh to 5 percent from 10 percent earlier. This rate cut gave a tax relief of Rs 12,500 to every taxpayer.
If we further look back in 2014, tax relief to taxpayers was led by the Narendra Modi government. In that budget, the minimum tax-exemption limit was raised from Rs 2 lakh to Rs 2.5 lakh. Along with that deduction, limit under section 80C was hiked by Rs 50,000 to Rs 1.5 lakh and deduction on interest paid on a housing loan to Rs 2 lakh.
If we check with the FY 17-18 tax slab, income up to Rs 2.5 lakh for resident individuals (age below 60 years) is exempt from tax. For senior citizens aged 60 years and above but below 80 years, income up to Rs 3 lakh is exempt from tax. Income up to Rs 5 lakh is exempt from tax for super senior citizens (age 80 years and above).