New norms related to income tax and Goods and Service Tax (GST) will come into effect from Monday.
As announced in the interim budget by former finance minister Piyush Goyal, the income tax department will give a ‘straight rebate’ of Rs 12,500 to people having an annual income of Rs 5 lakh from the beginning of the financial year 2019-20 beginning, i.e. 1 April.
For people earning more than Rs 5 lakh annually, the ‘old’ tax rates will continue. However, people having taxable income of Rs 6.5 lakh per annum too can avail ‘tax rebate’ provided they invest Rs 1.5 lakh in specified investments such as PPF, General Provident Fund (GPF) and insurances.
If the return filed or taxable income is Rs 5 lakh, then their tax liability will be nil because we will be giving a rebate of the total tax which is due on Rs 5 lakh of taxable income.”
About three crore taxpayers would be benefitted from this enhanced standard deduction and revenue forgone for this would be about Rs 4,700 crore, the CBDT Chairman had said.
GST slashes rates for realty
To boost demand in the real estate sector, the GST Council slashed tax rates for under-construction flats to 5 percent and affordable homes to 1 percent, effective 1 April.
Earlier, the GST was levied at 12 percent with an input tax credit (ITC) on payments made for under-construction property or ready-to-move-in flats where completion certificate is not issued at the time of sale.
The council had also expanded the definition of affordable housing for the purpose of availing GST benefits to those flats costing up to Rs 45 lakh and measuring 60 sq metre carpet area in metros (Delhi-NCR, Bengaluru, Chennai, Hyderabad, Mumbai-MMR and Kolkata) and 90 sq metre carpet area in non-metros.
Effective 1 April, tax deducted at source (TDS) limit on rent income has been increased to Rs 2.4 lakh from the earlier Rs 1.80 lakh. The TDS threshold on interest from bank and post office deposits would be raised from Rs 10,000 to Rs 40,000. The government also exempted tax on notional rent for unsold units for two years.