The fact that the budget on 1 st day of February was just an interim budget, our FM refrained from making any significant policy decisions or announcements for direct taxes., he did announce few benefits for the small taxpayers enumerated as below.
- There is No increase in threshold limit of Rs 2,50,000. It is a rebate under Section 87A increased from RS 2,500 to Rs 12,500. And eligibility of total income not to exceed Rs3,50,000 increased to Rs5,00,000. Thus the benefit will be to only those taxpayers whose total income less than Rs5,00,000.
- There is a Standard Deduction of Rs.50,000. Which is 40,000 earlier.
- U/s 24 of income tax act 1964 notional rent can be taken in the computation of income under the head House property.
- Notional rent not applicable for 2 years after completion of the house/building.
- Exemption from Capital Gain on the sale of the residential house under Section 54 has been extended to purchase of 2 residential house subject to a maximum capital gain of Rs. 2 Crores. This option can be claimed once in a lifetime.
- Deduction u/s 80IBA for developers of affordable housing scheme has been extended by one year for projects registered until March 31, 2020.
- TDS thresholds have been increased for
– interest on bank and post office deposits to Rs. 40,000 from Rs. 10,000. - Tds will be deducted on rent on exceeding 2,40,000 which was 1,80,000 earlier.
- The Gratuity limit was increased from 10,00,000 to 30,00,000.