Income Tax rules change: The Finance Bill 2019 mentions several changes to the Income Tax Act. These will come into effect when the Bill gets the approval of the parliament. The finance bill says that the existing rates of the income tax for the financial year 2019-20 have been continued. But relief has been provided to the taxpayers through certain amendments. These changes will put more money in the hands of individual taxpayers and help improve their lives. Take a look:
1. Income Tax standard deduction limit raise: The Bill proposes to amend section 16 of the Income Tax Act to provide relief to the salaried taxpayers by way of increasing the amount of deduction from salary income, from existing Rs 40,000 to Rs 50,000.
2. Relief on the second self-occupied house: The Finance Bill provides relief to the taxpayer by allowing him/her an option to claim nil annual value in respect of any two houses, declared as self-occupied, instead of one such house as currently provided by the law.
3. Notional rent relief: The bill to provides relief to the taxpayers by proposing no tax on notional rent in respect of unsold inventory up to two years, instead of existing one year, from the end of the financial year in which the certificate of completion is obtained from the competent authority.
4. Relief on borrowed capital: The Finance Bill seeks to amend section 24 of the Income-tax Act to “provide that the monetary limit of deduction on account of interest payable on borrowed capital shall continue to apply to the aggregate of the amounts of deduction in case of more than one self-occupied houses.
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5. LTCG relief: For those having long-term capital gains up to Rs 2 crore arising from the transfer of a residential house, the bill proposes to amend section 54 of the Income-tax Act to provide relief to the taxpayers. The bill proposes to give the assessee a one time opportunity, at his option, to utilise the said amount for the purchase or construction of two residential houses in India instead of one residential house as currently provided.
6. Affordable housing: The bill seeks to amend section 80-IBA of the Income-tax Act to augment the supply of affordable houses by extending the time limit from
31st March 2019 to 31st March 2020 for obtaining approval of the housing project for availing deduction.
7. Tax rebate Raise: The Finance Bill proposes to amend section 87A of the Income-tax Act to increase the maximum amount of tax rebate to Rs 12,500 from the current Rs 2500. The tax rebate will be admissible to taxpayers having total income up to Rs 5 lakh, instead of current Rs 3.5 lakh.
8. TDS on interest income: The Finance Bill seeks to amend section 194A of the Income-tax Act to increase the threshold limit from Rs 10,000 to Rs 50,000 for deduction of tax at source (TDS) on interest income paid by a bank, co-operative society or a post office. This doesn’t apply to interest earned on securities.
9. Rental Income relief: The Finance Bill proposes to amend section 194-I of the Income-tax Act to rationalise the threshold limit from Rs 1.8 lakh to Rs 2.4 lakh for deduction of tax at source on rental income.