Jaikumar Tejwani & Co LLP,

INTERIM BUDGET 2019 Chartered Accountants

INTERIM BUDGET 2019

Interim Budget 2019-20 was presented in Parliament on February 01, 2019 by the Union
Minister for Finance, Corporate Affairs, Railways & Coal, Shri Piyush Goyal.

An “interim budget” is a temporary financial document that helps a business or public

agency get through a period that is shorter than a typical budget cycle, which is normally
one year.

Proposed Amendments in Direct Tax Provisions

A.Individuals
Rates of Income Tax of AY 2019-20 is proposed to be continued for AY 2020-21
1. Income tax slabs for individual taxpayers are as follows-
For all Individuals below 60 Years
 Income up to Rs 2.5 lakhs - Nil
 Income above Rs 2.5 lakhs and up to Rs. 5 lakhs - 5 per cent
 Income above Rs.5 lakhs and up to Rs. 10 lakhs - 20 per cent
 Income above Rs. 10 lakhs - 30 per cent

For Senior Citizens above 60 Years but below 80 years

 Income up to Rs 3.00 lakhs - Nil
 Other Slabs, as per above schedule

For super Senior Citizens on or above 80 Years

 Income up to Rs 5 lakhs - Nil
 Other Slabs, as per above schedule

Plus: Tax to be further increased by Surcharge@

 Income above Rs. 50 lakhs but less than 1 Crores - 10 per cent
 Income above Rs. 1 Crores - 15 per cent
Plus: Tax + SC to be increased by Health & Education Cess @ - 4 per cent

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 Jaikumar Tejwani & Co LLP,
INTERIM BUDGET 2019 Chartered Accountants

2. Proposed Change in Limit of Tax Rebate [Section 87A]

Individual taxpayers having taxable annual income (i.e. after all available deductions)
up to Rs 5 lakhs to get full tax rebate and therefore will not be required to pay any
income tax. Those earning taxable income upto Rs. 5,00,000/- will now be eligible for
a rebate u/s 87A upto Rs 12,500/-.

3. Proposed Increase in Standard deduction [Section 16]

For salaried persons, the standard deduction of Rs. 40,000/- is proposed to be
increased to Rs. 50,000/- .

4. Proposed to Exempt Notional Rent on Second Self-Occupied House [Section 23(4)]

Currently, income tax on notional rent is payable if an individual has more than one
self-occupied house. Now, it is proposed to exempt levy of income tax on notional
rent on a second self-occupied house.

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 Jaikumar Tejwani & Co LLP,
INTERIM BUDGET 2019 Chartered Accountants

5. Proposed saving on capital gains tax by investing in two houses [Section 54]
It is proposed that the benefit of rollover of capital gains under section 54 of the
Income Tax Act will be increased from investment in one residential house to two
residential houses for a tax payer having capital gains up to Rs 2 crore. This benefit
can be availed once in a life time.
For example, if any person sells a house and earns long-term capital gains of Rs 1
crore, he will be able to invest the capital gains of Rs 1 crore for buying two houses
instead of one currently; however this benefit is available only once in a lifetime.

6. Proposed Change in TDS celling on Interest [Section 194A]:

TDS threshold on interest payment from bank and post office deposit is proposed to
be raised from Rs 10,000/- to Rs 40,000/-.

7. Proposed Change in TDS celling on Rent [Section 194I]:

TDS threshold on rent payment is proposed to be raised from Rs 1,80,000/- to Rs
2,40,000/-.

B. Tax SOPS for Real Estate Sector

1. Proposed not to tax notional rent for unsold units for 2 years [Section 23 (5)]
To give impetus to the real estate sector, it is proposed to extend the period of
exemption from levy of tax on notional rent on unsold inventories from one year to
two years.

2. Proposed Extension in Affordable Housing Scheme [Section 80-IBA]

For making more homes available under affordable housing, the benefits under
Section 80-IBA of the Income Tax Act is proposed to be extended for one more year,
i.e. to the housing projects approved till 31st March, 2020.

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 Jaikumar Tejwani & Co LLP,
INTERIM BUDGET 2019 Chartered Accountants

C. Tax Reforms
Simplification of Direct Tax System to benefit Tax-payers
The Government has now approved a path breaking, technology intensive project to
transform the Income-tax Department into a more assessee-friendly one. All returns
will be processed in twenty-four hours and refunds issued simultaneously. Within the
next two years, almost all verification and assessment of returns selected for scrutiny
will be done electronically through anonymised back office, manned by tax experts
and officials, without any personal interface between taxpayers and tax officers.

End of Document

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