#Budget2019: Modi Government Delivers For Middle Class; Full Tax Rebate For Income Up To Rs 5 Lakh

In a historic move, Finance Minster Piyush Goyal has announced an increase in the income tax threshold limit to Rs 5 lakh, meaning any citizen earning income below Rs 5 lakh per annum won’t have to pay any income tax.

Thus, via this measure, around 3 crore middle class taxpayers will get tax exemption. It will also result in a Rs 22,000 crore consumption stimulus. In 2015-16, around 99 lakh citizens had showed income below Rs 2.5 lakh per annum.

The Finance Minister said that Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments in provident funds and prescribed equities.

In another relief fro the middle class, Tax Deducted at Source (TDS) threshold on interest on bank and post office deposits has been raised from Rs 10,000 to Rs 40,000, rising by 300 per cent. The TDS threshold on rental income has also been raised from Rs 1.8 lakh to Rs 2.4 lakh. The threshold for standard tax deduction has been raised from Rs 40,000 to Rs 50,000.

Finance Minister also announced that the benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees, adding that the benefit can be exercised once in a lifetime.

Piyush Goyal added that development had became a Jan Andolan (people's movement) under the present Government. This is not just an Interim Budget, this is a vehicle for the developmental transformation of the nation, he added.

It was reported in November 2018 that the budget would include significant direct tax announcements, marking a significant departure from previous governments.