The Interim Budget 2019 has been introduced and left a question for the Indian tax Payers. That how much this budget will impact on their tax liability?
People have a misconception that the tax rate has changed and the basic limit of Rs. 2,50,000/- has raised to Rs. 5,00,000/-.They do not understand the actual meaning of this proposal.
Actually, this is a rebate given to tax payers, who have their total taxable Income (after Exemption and all Deduction) up to Rs. 5,00,000/-.
Standard deduction to salaried people has risen to Rs. 50,000/- fro Rs 40,000/-
Now understand how much tax you have to pay according to proposal of Interim Budget 2019.
Example 1 – If your Total salary is Rs 7,00,000/- per annum and you have saved the full amount up to the limit i.e Rs. 1,50,000 u/s 80C. Then what will be your tax liability.
Gross salary – 7,00,000/-
Standard deduction – 50.000/-
Savings u/s – 80C – 1,50,000/
Tax on total Income – 12500/-
Rebate – 12500/-
Tax – Nil
If your total Income Increases even by Rs 10/- You will not get the rebate and your tax on total Income will be:
Example 2 – If your Total salary is Rs 7,00,010/- per annum and you have saved the full amount up to the limit of Rs. 1,50,000 u/s 80C. Then what will be your tax liability.
Gross salary – 7,00,010/-
Standard deduction – 50.000/-
Savings u/s – 80CCE – 1,50,000/
Tax on total Income – 12502/-
Cess@4% – 500/-
Rebate – Nil
Tax – 13202/-
(Note: Standard deduction is allowed to salaried tax payers. Others can calculate their tax on total Income (Gross Income(-)applicable Deduction and exemption ).
Tax rates are not changed and they remain same till final budget.
These are the proposal of interim budget. Complete budget is expecting in June/July 2019. After formation of the new government. More changes are likely to come in effect after complete budget.
In a nutshell this budget proposal will give a good benefit for those taxpayers who have their taxable income up to Rs. 5,00,000/-or who can reduce their taxable income(with investment/Expenses in other available options of Deduction
To easily understand your queries about tax liability after this budget proposal. You can download and use this tool of Auto Tax Calculator Version 14.0 for FY 2019-10.
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Informative. thanks for sharing info