In a major boost to the small taxpayer, the government said it will increase the exemption limit for income tax paid by individuals from the current Rs 2.5 lakh to Rs 5 lakh. This translates to a benefit of Rs 18,500 crore to more than 3 crore taxpayers.

Share Market Live

NSE

Below is commentary from experts on what this measure means for the taxpayer:

The government introduced a number of tax benefits aimed at boosting the disposable income of the middle class: incomes of up to Rs 5 lakh receive the full rebate, an increase from Rs 2.5 lakh; the standard deduction is increased to Rs 50,000 from Rs 40,000 for employees; a rollover of capital gains tax for two houses is provided; among others. These tax benefits to the middle income class will lead to a benefit of Rs 18,500 crore (0.1 percent of GDP).

- Sonal Verma, chief economist, Nomura

Individuals having income of Rs 6.5 lakh will not be required to pay any tax if they take full deduction of 80C on savings instruments like PPF etc. Standard deduction raised from Rs 40,000 to Rs 50,000 — this benefits the salaried class. Big boost to housing sector as no notional taxation on second house purchase. Section 54 exemption can be claimed for purchase of second house. This benefit is a one-time lifetime benefit for individuals. Threshold TDS on rent — the limit raised from Rs 1.8 lakh to Rs 2.4 lakh — encourages rental housing.

- Poorva Prakash, Senior Director, Deloitte India

The Union Budget 2019-20 has clearly focused on leaving more disposable income in the hands of the individuals by increasing the basic tax exemption up to Rs 5 lakh and up to Rs 6.5 lakh with specified investments. In case of a couple earning, this implies an income of Rs 10-12 lakh — Rs 1 lakh per month.

- Sunil Rohokale is MD and CEO ASK Group

“The income tax sops for the taxpayers will lead to higher disposable incomes for discretionary spends. This will support demand uptick.

- Ranen Banerjee, Partner & Leader – Public Finance and Economics, PwC India

“Middle and small class taxpayers given some income tax benefit in this interim budget. Rs 5 lakh exemption proposed is a huge benefit extended to small taxpayers. The government recognises for the first time that Rs 5 lakh income per annum is in effect the subsistence limit for a good life and should not be taxed.

- Atul Gupta, senior director, Deloitte India

“The last budget of the NDA government has been marked not only as an interim budget but as a transformational vehicle aimed at bringing back the trust among the middle-class taxpayers. Providing a full tax rebate to the taxpayers with a taxable income up to Rs 5,00,000 is a major relief for such taxpayers, as it will benefit 3 crore taxpayers including the self-employed, small business, salaried class etc. To further pass on the benefit to the salaried class, the limit of standard deduction has been increased from Rs 40,000 to Rs 50,000 to ensure more net-in-hand income for this class"

- Akhil Chandna, Director, Grant Thornton India LLP

First Published:Feb 1, 2019 3:04 PM IST