Individual taxpayers having taxable annual income up to Rs.5 lakhs will not be required to pay any income tax. The Finance Minister said that persons having gross income up to Rs. 6.50 lakhs are not required to pay any income tax if they make investments in provident funds, specified savings and insurance etc. Additional deductions such as interest on home loan up to Rs. 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance and medical expenditure on senior citizens etc, are also provided for in the Interim Budget 2019-20. Thus tax benefit of Rs. 18,500 crore is proposed to be provided to an estimated 3 crore middle class and small taxpayers comprising self employed, small business, small traders, salary earners, pensioners and senior citizens.
Proposed Amendment of section 87A.
8. In section 87A of the Income-tax Act, with effect from the 1st day of April, 2020,––
(a) for the words “three hundred fifty thousand”, the words “five hundred thousand” shall be substituted;
(b) for the words “two thousand and five hundred”, the words “twelve thousand and five hundred” shall be substituted.
Source- Interim Budget 2019-20