Budget 2019: Additional Income Tax deduction of Rs 1.5 lakh on affordable home loans
Nirmala Sitharaman announced an additional Income Tax deduction of Rs 1.5 lakh on affordable home loans. As per the proposal, income tax payers will get tax rebates of around Rs 3.5 lakh on loans of up to Rs 45 lakh borrowed upto March 31, 2020.
HIGHLIGHTS
- Finance Minister Nirmala Sitharaman announced an additional Income Tax deduction of Rs 1.5 lakh on affordable home loans
- As per the proposal, income tax payers will get tax rebates of around Rs 3.5 lakh on loans
- It is applicable on loans of up to Rs 45 lakh borrowed upto 31 March 2020
Association Finance Minister Nirmala Sitharaman, in her maiden Budget discourse on Friday, reported an extra Income Tax finding of Rs 1.5 lakh on reasonable home credits.
According to the proposition, personal citizens will get expense refunds of around Rs 3.5 lakh on credits of up to Rs 45 lakh acquired upto March 31, 2020.
“To give further impulse to reasonable lodging, extra conclusion of Rs 1.5 lakh will be given on intrigue paid on credits obtained upto 31 March 2020 for buy of house up to Rs 45 lakh,” Nirmala Sitharaman said.
In February, the Narendra Modi government had given relief to income tax payers with a rebate in income tax and an increase in standard deduction.
The government announced an income tax rebate of up to Rs 12,500 under Section 87A of the Income Tax Act. Earlier, the rebate was up to Rs 2,500. This rebate is available on income up to Rs 5 lakh a year.
This translates into zero tax on annual income up to Rs 5 lakh. There is exemption from income tax on annual income up to Rs 2.50 lakh. This exemption extends to Rs 3 lakh in the case of senior citizens.
The government increased the standard deduction from Rs 40,000 to Rs 50,000 and also increased the income tax rebate under Section 87A of Income tax Act.
Besides, there is another deduction of up to Rs 1.5 lakh under section 80C for investments made in instruments such as Public Provident Fund, expenses incurred on children’s education fee and stamp duty paid for registration of a house.
Further investment of up to Rs 50,000 in the national pension scheme (NPS) qualifies for additional tax deduction Section 80CCD(1B) of the Income Tax Act.
However, the income tax slabs remained unchanged in February’s interim budget. There is zero tax on income up to Rs 2.5 lakh, beyond this tax rate is 5 per cent on income up to Rs 5 lakh. This amounts to Rs 12,500.
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