Finance Minister Nirmala Sitharaman on Friday said that income tax payers do not have to pay tax if they earn less than Rs 5 lakh per annum. "Only when annual taxable income exceeds 5 lakh, are they required to pay any tax," Sitharaman said during her maiden budget speech.
This means that small traders and pension earners must pay tax only if annual income exceeds Rs 5 lakh.
Additional deductions:
In addition, Sitharaman also proposed a couple of income tax deductions for income tax payers. To make electric vehicles affordable, the government has decided an additional income tax deduction on Rs 1.5 lakh on interest paid on loans taken to purchase electric vehicles. Similar deductions have also been proposed to promote affordable housing. "A tax holiday has already been provided. Further, an additional deduction of upto Rs 1.5 lakh on interest on loans for purchasing affordable house upto Rs 45 lakhs has been proposed," said Sitharaman.
The finance minister said that the direct tax revenue has increased from 78 per cent in the last 2 years. Nirmala Sitharaman did not change any tax slabs following the path of her predecessor Arun Jaitley. In Union budget 2018, had no change in income tax slabs for individuals. However, it accounted for a standard deduction of Rs 40,000 for the salaried for transport and health. Senior citizens, on the other hand, benefited from deduction for health insurance which was raised to Rs 50,000.
