Budget 2019: Want to reduce your taxable income to 5 lakh? 6 possible deductions you can claim

People whose income is more than five lac can plan their investments wisely and avail other deductions and exemptions to stay tax-free in the financial year 2019-20.

Income Tax exemption slab has been modified in a big way for middle class, salaried people.

Budget 2019: Just when the spectators of Interim Budget 2019 thought that the Modi government has nothing to offer to the middle class and the salaried section of the society in its last budget of current tenure, Interim Finance Minister Piyush Goyal wooed many a hearts of the Indian populace when he proposed to extend the prevalent Income Tax Exemption slab from Rs 2.5 lakh to Rs 5 lac. In a perfect play of words, the FM said, “Because of major tax reforms undertaken by us during the last four and half years, both tax collections, as well as the tax base, have shown a significant increase and we have made progress towards achieving a moderate taxation-high compliance regime. It is, therefore, just and fair that some benefits from the tax reforms must also be passed on to the middle-class taxpayers. Keeping this in view, I propose to further reduce the tax burden on such taxpayers.” The Income Tax exemption slab has been modified in a big way to the satisfaction of the middle class and salaried people during Interim Budget 2019. The FM announced changes in the first slab of the Income Tax, thereby the rest of the Income Tax structure stays the same. However, people whose income is more than five lac can plan their investments wisely and avail other deductions and exemptions to stay tax-free in the financial year 2019-20, here's how: 1. Standard Deduction Taxpayers can claim a Standard Deduction of Rs.50,000 from FY 2019-20. Finance Minister Arun Jaitley had re-introduced Standard Deduction of Rs.40,000 in Budget 2018 in lieu of medical and transport allowance. The same has been hiked by 25% to Rs.50,000 for the upcoming year. 2. Section 80 C Investments in PPF, ELSS, NSC, LIC, etc stay tax-free, thereby, another Rs. 1.5 lac can be exempted from taxes by claiming deductions under Section 80 C. Your children’s (up to two) tuition fees can also be claimed under this section apart from the repayment of principal repayment on a home loan. 3. Section 24 A deduction of Rs. 2 lac can be further claimed for interest on Home loan under Section 24. 4. Section 80 CCD (IB) Furthermore, Rs.50,000 can be claimed under Section 80 CCD (IB) for tax exemption by investing in the National Pension Scheme (NPS). 5. Section 80 D Medical insurance cover for self and family is covered under Section 80 D for a premium up to Rs. 25,000. The claim can be doubled if you take a health cover for parents. 6. Section 80 TTA Interest on savings accounts up to Rs.10,000 can be claimed for tax exemption under Section 80 TTA.