Big news for middle class people. The new financial year kicks off on April 1st, and it looks like the middle class is in for some nice surprises. This is based on the announcements made in the general budget that will take effect in the upcoming financial year. During the budget presentation on February 1st, Finance Minister Nirmala Sitharaman made several decisions aimed at benefiting the middle class.
So, what’s on the table?
In a positive update for taxpayers, Finance Minister Nirmala Sitharaman announced that under the new tax system, individuals won’t have to pay income tax on earnings up to Rs 12 lakh (which translates to an average monthly income of Rs one lakh, not counting special income like capital gains). Plus, with a standard deduction of Rs 75,000, salaried taxpayers will have a total limit of Rs 12.75 lakh.
On top of the reduced slab rates, there are tax exemptions designed so that many won’t have to pay any tax at all. This is set to significantly lighten the tax load for the middle class, leaving them with more cash to spend, save, and invest, which should help boost the economy.
TDS/TCS Relief
In addition, there are some changes to TDS/TCS rates. The tax deduction limit on interest for senior citizens is set to double from Rs 50,000 to Rs 1 lakh. The annual TDS limit on rent is also proposed to rise from Rs 2.4 lakh to Rs 6 lakh. Moreover, the delay in TDS payments until the income tax return due date has been decriminalized, and a similar exemption is expected for TCS provisions.
It is now suggested to extend the deadline for submitting update returns for any assessment year from the current two years to four years. Additionally, for properties owned by taxpayers, there is a proposal to permit the annual value benefit for two such properties without any conditions.