October 2019

THE FINANCE (No. 2) ACT, 2019

P.N. Shah | Arti Shah
Chartered Accountants

THE FINANCE ACT, 2019

Mr. Piyush Goyal, the eminent chartered accountant, in his capacity as Finance Minister presented a very bold Interim Budget of the Narendra Modi government on 1st February, 2019. He tried to give benefits to farmers, the poor, the unorganised sector, salaried employees and the middle-class families. The Interim Budget was unique as it gave relief to certain deserving persons in respect of the income tax payable by them in the financial year beginning from 1st April, 2019. No Finance Minister in the past has given any concession in the direct tax provisions in an Interim Budget. With this Interim Budget, the Finance Act, 2019 was passed in February, 2019 and received the assent of the President on 21st February, 2019.

 

BENEFITS TO SALARIED EMPLOYEES AND MIDDLE CLASS FAMILIES

While delivering the Interim Budget, the Finance Minister stated that as per convention the main tax proposals would be presented in the regular budget. However, he pointed out that small taxpayers, especially the middle class, salary earners, pensioners and senior citizens, need certainty in their minds at the beginning of the year about their taxes. He said that while the existing rates of income tax would continue for the financial year 2019-20, the following amendments have been made by the Finance Act, 2019 for giving benefits to salaried employees and middle-class families; these benefits will be available in the computation of income and in the taxes payable on income for the financial year commencing on 1st April, 2019.

 

Salary income: In the last Budget the provision for allowing standard deduction of Rs. 40,000 was made in place of the earlier provision for allowance for reimbursement of medical expenses and transport allowance. This standard deduction is now increased to Rs. 50,000 w.e.f. 1st April, 2019. This will benefit all salaried employees and pensioners.

 

House property income: At present an individual is entitled to claim exemption in respect of one self-occupied house property. But from 1st April, 2019 he will be entitled to claim exemption in respe

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