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changes in income tax provisions Budget 2019

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.

 highlights of Budget 2019

— 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%.

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