Finance Minister has announced the Income tax rebate in FY 2019-20 with complete tax rebate on income up to Rs 5 lakh. He has declared complete rebate in income tax on taxable income up to Rs 5 lakh. This is to remember that
The decision to provide tax rebate will benefit only those people having taxable income of Rs 5 lakh or less.
Other announcement were also made like hike in standard deduction from Rs 40,000 to Rs 50,000, there is no change in tax slabs or deduction limits.
Finance Minsiter said, “Tax slabs are not raised. It is only a rebate that will benefit people having taxable income up to Rs 5 lakh.”
Whether, the tax rebate will benefit persons having income over Rs 5 lakh?
Answer is “No,” The decision to provide tax rebate will benefit only those people having taxable income of Rs 5 lakh or less.
The Budget document explained the rebate as per Financial Express
“Clause 8 of the Bill seeks to amend section 87A of the Income Tax Act to provide relief to the individual taxpayers by increasing the maximum amount of tax rebate to Rs 12,500 from existing Rs 2,500. The tax rebate shall now be admissible to taxpayers having total income up to Rs 5 lakh, instead of existing Rs 3.5 lakh.”
So, the Finance Bill clearly states that the benefit of the tax rebate will be for people having taxable income up to Rs 5 lakh only.
List of Existing Benefits kept Unchanged
- There is no change in existing tax slabs or deduction limits. It means the existing tax slabs will start at Rs 2.5 lakh. Similarly, the Section 80C deduction limit has also be kept unchanged as Rs 1.5 lakh.
- The deduction for interest paid on housing loan for self-occupied properties will remain unchanged at Rs 2 lakh.