Interim Budget 2019 an Overview

  • The Finance Minister presented the Interim Union Budget 2019 1st Feb as the general elections are scheduled later this year. The Interim Union Budget 2019 aims to provide benefits to the middle-class taxpayers especially salary earners, pensioners, and senior citizens. Key tax and regulatory proposals of the Interim Union Budget 2019 have been summarised herein under:
  • The end-date for obtaining approval from the competent authority to claim the profit-linked deduction by taxpayers engaged in the business of developing and building affordable housing projects extended from 31 March 2019 to 31 March 2020.
  • The threshold in a financial year for not deducting tax at source from payment of rent increased from INR180,000 to INR240,000.
  • The threshold in a financial year for not deducting tax at source on interest income from deposits with a banking company or co-operative society engaged in banking business or post- office increased from INR 10,000 to INR 40,000
  • The eligible rebate from income-tax payable enhanced up to INR 12,500 (currently up to INR 2,500) for resident individuals whose total income does not exceed INR 500,000 (currently up to INR 350,000).
  • The standard deduction in a financial year from salary income enhanced to INR50,000 (currently INR40,000).
  • The second Self Occupied Property (SOP) will not be subject to tax on a notional rent basis. Further, the aggregate deduction for interest on housing loan for both such SOPs capped at INR200,000.
  • The income tax exemption on Long Term Capital Gain (LTCG) from the sale of a residential house will be available even if re-invested in two house properties in India on a once in a lifetime basis provided such LTCG do not exceed INR20,000,000.
  • The period for which the Annual Value of house property held as stock in trade and not let out which is considered as NIL extended to two years from the end of the financial year of obtaining the completion certificate (currently this period is one year from obtaining such certificate).

CA Pankaj Kumar Mishra