Feb 052019

Tax proposal in Budget 2019

  1. Existing rates of income tax will continue for FY 2019-20. Thus, it is important to note that slab rate for taxing income remains intact.

Thus, slab rates for financial year 2019 -20 will be summarized as below:

Income tax slab Individual Tax Payers (Less Than 60 Years Old) & HUF Senior Citizens (60 Years Old Or More but Less than 80 Years Old) Super Senior Citizens(80 Years Old Or More)


Up to Rs 250,000/- NIL NIL NIL
Next up to Rs 300,000/- 5% NIL NIL
Next up to Rs 500,000/- Rs 2,500/- + 5% 5% NIL
Next up to Rs 10,00,000/- Rs 12,500/- + 20% Rs 10,000 + 20% 20%
More than Rs 10,00,000/- Rs 1,12,500/- + 30% Rs 110,000/- + 30% Rs 100,000 + 30%
  • On the above cesses @ 4% and surcharge at the rates as may be applicable are extra.

The above rates are also applicable for salaried class individuals for deducting income from their salary for financial year 2019-20.

  1. Individual taxpayers having taxable annual income up to Rs 5 lakhs will get full tax rebate.

Impact of above proposal:

As a result, even persons having gross income up to Rs 6.50 lakhs may not be required to pay any income tax if they make investments in provident funds, specified savings, insurance etc. (No tax is payable on initial income of Rs 250,000 + Deduction under section 80C can be claimed up to Rs 150,000 + Rebate on income tax payable on further income of Rs 250,000 can be claimed for income earned in FY 2019-20.)

In fact, with additional deductions such as interest on home loan up to Rs 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance, medical expenditure on senior citizens etc, persons having even higher income will not have to pay any tax.

Effect of above amendment:

Now in financial year 2019-20 individuals earning up to Rs 650,000/- are no longer needs to pay tax if they invest Rs 150,000/- in eligible investments as mentioned under section 80C.

However, in case individual is earning anything more than Rs. 650,000/- then he needs to pay tax at normal rates as per slab rates applicable to him as mentioned in point no 1 above.

It is worth to note here that for financial year 2019-20 the amount of rebate is increased and slab rates are kept intact. Thus, income tax will be computed normally as per slab rates applicable to individuals first and thereafter rebate in computed for those whose taxable income (Gross income minus Deduction allowable w.r.t. investments) is less than Rs 500,000/-.

The above rule may be explained in below cases:

Case No Taxable total income Tax payable
1 Rs 500,000/- NIL
2 Rs 500,100/- Rs 12,500/- + 4% Cess
  1. In case of salaried persons standard deduction is raised from Rs 40,000 to Rs 50,000

This effect of this amendment is that in case of all salaried class individual from financial year 2019-20 onwards an additional deduction of Rs 50,000/- in computing income from salary income.

  1. Now income tax will be not levied under the head “Income from House Property” in case of an individual is having 2 self occupied houses.

Impact of above amendment is that now onwards from financial year an individual can claim two of his properties as self occupied and may claim his assumed rental income as NIL or even negative in can a running loan is there on that property. This loss can be set off against the income from salary also.

  1. TDS deduction limit on interest earned on bank / post office deposits is being raised from existing Rs 10,000 to Rs 40,000. Thus, in FY 2019-20 no TDS will be deducted by bank or post office on interest earned by depositors for interest income up to Rs 40,000/-

It was observed that in large number of cases retired individuals have to file their return of income as their annual interest income on deposits are high to get refund of TDS deducted on their interest income with no other income. Now this amendment is being made to relief compliance burden from such individuals.

  1. TDS deduction limit on rental income is to be increased from existing Rs 1,80,000 to Rs 2,40,000. Thus, TDS on rental income up to Rs 2,40,000/- is TDS free now for FY 2019-20.
  2. 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.
  3. For making more homes available under affordable housing, the benefits under Section 80-IBA of the Income Tax Act is being extended for one more year, i.e. to the housing projects approved till 31st March, 2020.
  4. 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, from the end of the year in which the project is completed.
Feb 012019

Due dates for the Month of February 2019
Income Tax
– TDS Payment for January
– Return for authorities deducting tax at source – GSTR 7 for January
– Details of supplies effected through e-commerce operator and the amount of tax collected – GSTR 8 for January
– Details of outward supplies of taxable goods and/or services effected – GSTR 1 for January
– Return for Input Service Distributor – GSTR 6 for January
Providend Fund
– PF Payment for January

– ESIC Payment for January
– Monthly return on the basis of finalisation of details of outward supplies and inward supplies along with the payment of amount of tax – GSTR 3B for January
– Return for Non-Resident foreign taxable person – GSTR 5 for January
– Details of Inward Supplies to be furnished by a person having UIN and claiming refund – GSR 11 for January.
Profession Tax
– Monthly Return (covering salary paid for the preceding month) (Tax Rs. 50,000 or more)
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