The Finance Minister Piyush Goyal presented the Interim Budget for the year 2019-20 in the Parliament on February 1,2019. The budget is mainly focused on uplift of agricultural sector and tax relief for small-middle class individual tax payers. The main highlight of the budget is that the government will now provide INR 6,000 a year to all small and marginal farmers, directly to their bank accounts.
Some of the key tax proposals are as follows:
- There are no changes in the individual income tax slabs and rates. However, individual taxpayers having taxable income up to INR 500,000 will get full tax rebate and will not be required to pay income tax. Please note that taxable income exceeding INR 500,000 will not get any benefit from such tax rebate and hence will have to pay income tax on full taxable income (as at present). The obligation to furnish tax return would continue for taxpayers having income below INR 500,000.
- The standard deduction limit for salaried persons has been raised from INR 40,000 to INR 50,000 per annum.
- The tax-free Gratuity limit raised from INR 2,000,000 to INR 3,000,000.
- Tax exemption on notional rent has been extended to a second self-occupied house. Currently it is restricted to one self-occupied house only.
There is no change in corporate income tax rates.
Goods and Services Tax (GST):
- It is proposed to increase the threshold limit for registration and payment of GST from INR 2,000,000 to INR4,000,000.
- It is proposed for businesses having an annual turnover of less than INR 50,000,000 to be allowed to file GST returns on a quarterly basis.
- Small service providers having annual turnover of up to INR 5,000,000 are eligible for composition scheme and can pay GST at 6% instead of 18%.
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