Interim Union Budget 2019 – Direct Tax Recommendations

HeadProposed recommendationAssessee Impacted
Salary IncomeStandard Deduction being increased to Rs.50,000 from Rs.40,000.Reduced tax burden on salaried employees
Income from House Property1. Nil annual lettable value on up to two self occupied house properties instead of just one.

2. Deduction w.r.t. interest payable on housing loan shall also now be available for two houses.

3. Any property held as stock-in-trade shall have Nil notional value for a period of 2 years from the end of the financial year when completion certificate was obtained.

Relief to property owners and builders
Long Term Capital Gain (LTCG)Benefit of exemption from payment of  LTCG on sale of residential property can now be availed by the tax payer if the investment is made in two (instead of one) residential properties provided the LTCG is up to Rs.2 crore. This option can used only once in the lifetime of the said taxpayer.Relief to taxpayers wishing to buy more than one house property.
Deduction u/s 80-IBA relating to construction of housing projectsThe scheme of providing 100% exemption on profits earned from the business of developing and building house projects u/s 80-IBA of the Act has been extended by 1 year i.e. from March 31, 2019 to March 31, 2020.Relief to builders
Rebate relating to Taxable IncomeNo tax is payable if taxable income does not exceed Rs.5 Lacs after all deductions. Maximum income tax rebate has also been increased to Rs.12,500 from Rs.2,500.Relief to middle class individuals
TDS Provision1.Interest income from banks up to Rs.40,000 will not attract TDS.

2. TDS exemption limit on rental income has been increased from Rs.180,000 to Rs.240,000.

Relief to middle class individuals