HIGHLIGHTS OF BUDGET SPEECH BY FM & ANALYSIS OF 5 LAKH EXEMPTION

HIGHLIGHTS OF BUDGET SPEECH BY FINANCE MINISTER PIYUSH GOYAL - ON TAXATION:

Existing rates of income tax to continue.
For Individuals full tax rebate up to ₹ 5,00,000 annual income after all deductions.
Standard deduction has increase from ₹ 40,000 to ₹ 50,000 for salaries clause.
Exempt on tax on second self-occupied house (No tax on notional rent on second house).
Ceiling Limit of TDS u/s 194 A (interest on post office and bank deposits) has increased from ₹ 10,000 to ₹ 40,000.
Ceiling Limit of TDS u/s 194 I has increased from ₹ 1,80,000 to ₹ 2,40,000.
Capital Gain tax Benefit u/s 54 has increased from investment in one residential house to two residential houses.
Benefit u/s 80-IBA has increased to one more year i.e. 2020.
Benefit has given to unsold inventory has increased to one year to two years.
Within 2 years, Tax assessment will be done electronically.
Income Tax returns processing in just 24 hours (also refund).
Minimum 14% revenue of GST to states by Central Govt.
Custom duty has abolished from 36 Capital Goods
Recommendations to GST council for reducing GST rates for home buyers.
Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments in provident funds and prescribed equities.

Based on the Tax proposals made by the Finance Minister, The given ₹ 5 Lakhs limits are applicable only to the persons whose income less than ₹ 5 Lakhs after all deductions like 80C (LIC Payment, PF etc…)
But the person whose earnings are more than ₹ 5 Lakhs cannot entitle this ₹ 5 Lakhs benefit.

For Example,

Case 1: One person’s income is ₹ 5,65,000 and claiming deductions under 80C say ₹ 70,000 for LIC Payment and PF Contribution

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