For people earning more than Rs 5 lakh annually, the "old" tax rates will continue. Those earning upto Rs 6,50,000 will not need to pay tax if they invest in specific schemes such as the Public Provident Fund and prescribed equities.
Talking about exemption from taxation, PM Modi said that there has always been a demand to exempt those with annual income up to Rs 5 lakh and Modi government fulfilled it. The gratuity limit has also been increased to Rs 30 lakh. The eligibility of the total income to avail the benefit has now been increased Rs 5 lakh from the earlier from Rs 3.5 lakh. "They will get a full rebate", Chandra told PTI in an interview.
People earning larger incomes do not benefit from the changes to the tax rules because there is no change in the slabs, but only a rebate, according to experts.
The Central Board of Direct Taxes (CBDT) frames policy for the I-T Department.
As per the proposal, those who earn more than Rs 5 lakh per annum and less than Rs 10 lakh will have to pay Rs 12,500 plus 20% of the amount by which income exceeds Rs 5 lakh. He allocated ₹19,000 crores for the programme in the 2019-20 budget.More news: US Suspends Compliance With INF Treaty, Gives Russia 6 Months
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The government has announced new measures to benefit salaried class, farmers and workers among others in the Budget.
- Standard tax deduction for salaried persons raised from 40,000 rupees to 50,000 rupees.
Budget for railways pegged at Rs 64,000 crore.
About three crore taxpayers will be benefitted from this enhanced standard deduction and revenue forgone for this will be about Rs 4,700 crore, he said.
Goyal also proposed that benefit of rollover of capital tax gains be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains of up to Rs 2 crore.