Finance Bill 2019 was passed by the Lok Sabha on February 12, 2019. In the Parliament Budget Session, both the Houses were adjourned. While the Lok Sabha cleared the Finance Bill 2019, the Citizenship Bill was not tabled in the Rajya Sabha.

Read the key highlights of the Finance Bill 2019 below.

Finance Bill 2019: Key highlights

Finance Bill 2019

  • The Finance Bill 2019 containing tax proposals was passed by the Lok Sabha with voice vote, completing the budgetary process in the Lower House.
  • Finance Minister Piyush Goyal, who earlier presented the Interim Budget 2019 also took a jibe at the Congress stating that the Modi government, unlike the previous UPA dispensation, in its Interim Budget 2019, did not reduce levies of the SUVs which are being used by the rich people.
  • Goyal also added that the tax-related proposals in the Finance Bill are aimed at enabling and helping the poor and the middle-class people living on a tight budget.
  • The Minister in the Finance Bill 2019 proposed to increase tax rebate for people with the annual income of Rs. 5 lakh to Rs 12,500 from Rs. 2,500 respectively. This will ensure that such people do not have to pay any taxes.
  • People having an annual income of over 6.5 lakh, or around 8-9 lakh can also take advantage of this tax slab if they invest in any tax saving schemes.
  • Notably, the next government post the General Elections 2019 will be coming out with the Full Budget in July. It would also contain a Finance Bill with tax proposals for the year 2019-20.

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Piyush Goyal’s Tax Proposals

  • Elaborating on the tax proposals, Goyal also said that the decision to raise the rebate for people with an annual income of Rs. 5 lakh was for providing greater certainty regarding tax liability. This is so as salary payments to these people is subject to Tax deduction at Source. (TDS)
  • The proposal, Goyal said, was embraced with euphoria both in and out of the House and would provide requisite impetus to savings, alongside boosting economic growth.
  • He also added that the Modi government in its 4.5-year regime has tried to benefit every section of the society and the taxpayers as well.
  • This, he said, also resulted in the growing tax base in the country. Notably, as per him, the tax collections have doubled in the last 5 years, with Indian becoming the fastest growing major economy in the world. The higher collections, he said, have allowed the government to earmark more resources for the economically and socially deprived sections of the society.
  • Goyal also said that the proposal to raise the standard deduction from Rs 40,000 to Rs 50,000 and hiking TDS limit on interest income from Rs 10,000 to Rs 40,000 will provide relief to senior citizens.
  • Housing sector, he said, will also get a boost owing to the proposals including interest subvention, allowing capital gains tax exemption on purchase of two flats from proceeds of sale of a house and hiking rebate on repayment of home loans.
  • Goyal also highlighted that the government is working to ensure a house for every citizen of India, by the time the country is celebrating its 75th year of Independence.
  • The government’s policies have also helped in keeping the property prices under check, said Goyal, adding the non-performing assets, too, have remained low in the sector, probably because ‘housewives insist that the home loans are repaid in time.’

Iconic Union Cabinet Approvals 2019!

LTCG (Long Term Capital Gains) on Property

  • Long-term Capital Gains, or LTCG, is the tax paid on profit generated by an asset such as real estate, shares or share-oriented products held for a particular time-frame. It, however, is different for different products.
  • The Finance Minister Piyush Goyal announced that the LTCG taxes arising out of a sale of property of upto Rs. 2 crore can be used to by 2 properties.
  • Presently, individuals can only reduce their LTCG on sale of property by buying a single house. The caveat here is that an individual can only claim this extended benefit once in their lifetime.
  • Also, even though one more house property can be claimed as an exemption, the total deduction on loss from house property remains the same as Rs 2 lakh.

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Currrent Tax Slabs (For Individual Taxpayers)

Income Tax Slab

Individual below the age of 60 years

Upto Rs. 2.5 lakh

Nil

Between Rs. 2.5 lakh – Rs. 5 lakh

5% of total income exceeding Rs. 2.5 lakh

Rs. 5 lakh – Rs. 10 lakh

Rs. 12, 500 + 20% of the total income exceeding Rs. 5 lakh

Above Rs. 10 lakh

Rs. 1.12 lakh + 30% of the total income exceeding Rs. 10 lakh

*Additional 4% on health and educational cess on each slab

Income Tax Slab

For Senior Citizens (60 years 80 years)

Upto Rs. 3 lakh Nil
Between Rs. 3 lakh – Rs. 5 lakh

5% 

Rs. 5 lakh – Rs. 10 lakh

20%

Income more than Rs.10 lakh

30%

*Additional 4% on health and educational cess on each slab

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Other Tax Relief Measures

Finance Bill 2019

  • Additional deductions on home loans, people with even higher income will not need to pay taxes.
  • The total tax benefit of Rs. 18,500 crore to an estimated 3 crore taxpayers.
  • For salaried people, however, standard deduction is raised from Rs 40,000 to Rs 50,000 per annum.
  • Also, exempt levy of income tax on notional rent for second self-occupied house.
  • Tax deducted at source threshold on interest earned on bank/post office deposits to be raised from Rs 10,000 to Rs 40,000. TDS threshold on rent to be raised to Rs 2.4 lakh. Affordable housing tax benefit extended for one more year.

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Verdict

Notably, the Narendra Modi government, through the revised tax breaks and slabs, is clearly looking to woo India’s salaried middle-class ahead of the upcoming General Elections. Also, Lok Sabha has passed both the Finance Bill 2019 and the Appropriation Bill to give the government authorisation of spending certain sums till the next government presents the full Budget for 2019-20.

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