Budget 2019: Modi govt brings massive relief to salaried class, income upto 5 lakh exempted from tax

The Modi govt increased the tax exempt limit on 'Income from Salary' from 2.5 lakhs to 5 lakhs. So the salaried class would not have to pay any income tax on income upto Rs 5 lakhs. The government also increased the standard deduction from Rs 40,000 to Rs 50,000.

Piyush Goyal

New Delhi: Union minister Piyush Goyal in his 2019 interim budget speech in the Lok Sabha on Wednesday brought about a massive cheer to the middle salaried class by announcing a revision in the income tax slab of the lower and middle class income bracket citizens.The Modi govt increased the tax exempt limit on 'Income from Salary' from 2.5 lakhs to 5 lakhs. In a nutshell, the salaried class would not have to pay any income tax on income upto Rs 5 lakhs. The government also increased the standard deduction from Rs 40,000 to Rs 50,000. Ahead of the 2019 general elections, many economic and political pundits had thought that the Centre shall bring about a revision in the tax slabs to reduce the burden on the middle class salaried workers. Currently, the citizens falling under the bracket of Rs 2.5-5 lakh bracket pay 5 percent tax. The government was considering giving a tax and procedural relief to this low-income group. The Union minister said tax scrutiny would be done electronically and there will be no interaction between the tax authority and the taxpayer. “Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by officials. All income tax returns to be processed within 24 hours and refunds to be issued simultaneously,” Goyal said. There were strong like hold that the investment limit under Section 80 C shall witness an increase so as to help the citizens to reduce their tax burden. However, there was no announcement made in this regards. Every year taxpayers have an expectation that the limits for deduction under Section 80C of the Income-tax Act will be enhanced. Presently the limit is INR 150,000 and it is an expectation that it may be increased to INR 250,000, which will enable tax savings for taxpayers and more inflow into various savings and investments schemes.