The Indian Government announced the Interim Budget in February 2019. It is the most recent budget announced by the government before the Lok Sabha elections. Hence, the government has made numerous possible attempts to please the public.

Within the budget, the Government of India has proposed numerous tax-friendly amendments for the public. If such changes get approved, then they will take effect from the financial year 2019-2020. With these proposed changes, the masses can save more tax this year.

Hence, here find out the key amendments in the Income Tax laws.

  • Increase in Standard Deduction

The government has replaced Medical Reimbursement and Conveyance Allowance with a Standard Deduction of INR 40,000 under the Union Budget, 2018 to provide you better tax benefits.

This year, you will be able to earn more tax benefits as the government intends to increase the limit to INR 50,000.

  • Increase in the Rebate u/s 87A

This tax benefit is for a resident individual. The tax benefit is of a rebate INR 2,500 for income up to INR 3, 50,000.

In the present year, you can save more as the Government intends to raise the rebate to INR 12,500 and extend the limit for those earning up to INR 5, 00,000.

  • Increase in Tax Deduction Limit on Interest Earned from Deposits

Another income tax law that is mandatory for banks, post-offices, and co-operative societies is to deduct the tax from the interest they pay on your deposits other than the savings deposits. This law is applicable is the amount of interest is or more than INR 10, 000.

This way, you can now deposit more money to other deposits. It is because the Government intends to increase the limit to INR 40,000.

  • Increase in TDS Applicable to Rent

This change will offer relief to those who have to cut TDS from their outgoing rental payments under section 194-1.

The government has proposed to increase this threshold for TDS deduction from INR 1, 80,000 to INR 2, 40,000. This is to ease the compliance load.

  • Increase in Time Duration for Housing Project Approval under Section 80-IBA

If a business is involved in the affordable housing project, you are able to get deduction under section 80-IBA on the profits earned from the business. But the approval for the project must be done by March 31, 2019.

To offer relief, this timeline has been extended by one year to March 31, 2020.

  • Stamp Duty Collection Made Simplified and Centralized

The Indian government has also proposed to centralize and simplify the process of collecting stamp duty for listed securities at a standard rate.

It is expected that from the next FY, stock exchanges will be able to collect stamp duty for trading stocks at a standard rate and deposit the same with the central government, which will further get divided among the states.

  • Increase in Tax Exemption on Capital Gains

If you are investing your income from the sale of house property in constructing or purchasing another house property, you will get a tax exemption under section 54. At present, you are permitted to invest in a single residential project.

The good thing is that it will help you save more tax as the Government has intended to make an investment of aforesaid income in two residential projects to get tax exemption. However, the capital gain must not be more than INR 2 crores. Also, you can avail this advantage only once in a lifetime.

  • Increase in the Investigation Period under PMLA

The government has also proposed to extend the investigation period from 90 days to 365 days under the Prevention of Money laundering Act, 2002. Under this duration, the attachment will stay valid.

In addition to this, the estimation of the period of 365 days, which is the time-frame during the investigation by any court, will be excluded.

  • No Rental Income for Two-Self-Occupied Properties

Finally, the present Income Tax Laws state that you can show one property as self-occupied and other as a let out. The total value of the self-occupied property will be deemed as nil. However, the additional properties are deemed as let out under section 23. The rental income earned from such properties is taxed under the income from house property.

Under the Interim Budget 2019, it has been proposed by the government to enable taxpayers to declare two houses as self-occupied and claim the annual value on them as nil. This way, you can claim a deduction on the interest paid on loans availed for both the properties.

The only benefit here is that the maximum deduction for interest on housing loans for self-occupied houses is INR 2 lakhs.