The government today proposed many changes in income tax provisions for this year. Finance minister Nirmala Sitharaman in her maiden budget kept the income tax slab rates unchanged but announced a slew of new income tax proposals that could impact many tax payers. The government today announced that Aadhaar and PAN would be made interchangeable for tax-filing purpose. This means that if you don’t have a PAN, you can file returns using Aadhaar.
— Additional income tax deduction of ₹1.5 lakh on home loans for affordable houses costing below ₹45 lakh. This benefit will be available for home loans taken till March 2020. Cumulatively, the interest paid on home loan deduction will go up to ₹3.5 lakh, from the current ₹lakh for self-occupied house property.
— The government also announced ₹1.5 lakh income tax deduction on interest paid on loans for purchase of electric vehicles.
— Retail investors in CPSE(central public sector enterprises) ETFs could get ELSS-like income tax benefits, according to the Budget proposals. The government today set a ₹1.05 lakh crore divestment target this year. Currently, investments made in ELSS (equity linked savings scheme) mutual funds, which come with a lock-in period of three years, are eligible for tax deduction of up to ₹1.50 lakh under Section 80C of the Income Tax Act.
— The government today increased income tax surcharge for HNIs (high net worth individuals) earnings more than ₹2 crore a year. Those earning between ₹2-5 crore will have shell out 3% more, with surcharge rate being increased from 15% to 25%. Those earning above ₹5 crore will have to shell out a surcharge of 37%, from current 15%.