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Budget 2019: No Tax for Salaried Employee upto Rs 7,00,000
Smashing all the buzz around the country Budget 2019 has finally been a populistic interim budget. A number of the pathbreaking announcement has been made via the vote on account presented on 1 Feb 2019 by FM Piyush Goyal. One of the most talked about amendment being Complete Tax Rebate to those having an annual taxable income of Rs 5,00,000 (under specified category). In his speech, the FM announced No Income Tax to those earning annually a taxable income of Rs 5,00,000. To the surprise, no changes have been bought in the Income Tax Slabs. Instead, the tax benefit would result out of the increased limits of Rebate u/s 87A. Previously those having total income upto Rs 3,50,000 were given a benefit of Rs 2,500 in taxes. But after Interim Budget 2019, the limits have respectively increased to income of Rs 5,00,00 and tax benefit of Rs 12,500. Now here comes the catch!! We have already understood about 87A and that no tax will be levied upon those having an annual income of Rs 5,00,000. But, do you know the great tax saving tip for those having gross income upto Rs 7,00,000? Well, we will decode the same for you. Before proceeding to the tax-free computation of income to the extent of Rs 7,00,000, we need to have a brief knowledge about some of the other pronouncements in the budget too. The Budget 2019 speech, in addition to substantial increment in Rebate u/s 87A limits,
- The limits of standard deduction have also been increased. The existing threshold of Rs 40,000 has been taken upto Rs 50,000.
- The limits of 80C have been kept unchanged
Calculation of Taxes for Salaried Employees After Budget 2019
| Particulars | Amount (Rs) |
|---|---|
| Salary Income | 7,00,000 |
| Less: Standard Deduction | 50,000 |
| Gross Total Income | 6,50,000 |
| Less: Deductions u/s 80C | 1,50,000 |
| Taxable Income | 5,00,000 |
| Less: Basic Exemption Limit | 2,50,000 |
| Tax Payable @ 5% on 2,50,000 | 12,500 |
| Less: Rebate u/s 87A | 12,500 |
| Net Tax Payable | NIL |
Resultantly, those having income taxable under the head salaries upto Rs 7,00,000 will be required to pay no taxes for the Financial Year 2019-20. In addition to this, if your income exceeds Rs 7,00,000 but you make contributions to the following you might end up saving taxes even higher taxes. Some of the attractive tax saving avenues are Home Loans Education Loans National Pension Scheme Medical Insurance etc
