Full income tax exemption for those earning up to Rs 5 lakh
New Delhi: While announcing tax sops in his Interim Budget, Finance Minister Piyush Goyal has not raised the threshold exemption limit from Rs 2.5 lakh to Rs 5 lakh as is widely perceived but has only extended the benefit of a rebate to those with income is up to Rs 5 lakh.
Experts say that for those with income above Rs 5 lakh, tax implications will still begin from Rs 2.5 lakh as is the case till now.
"... For the present, the existing rates of income tax will continue for 2019-20," Goyal said in his Budget speech and then went on to announce sops.
"Individual taxpayers having taxable annual income up to Rs 5 lakh will get a full tax rebate and therefore will not be required to pay any income tax," he said.
With specified investments and additional deductions, such as interest on the home loan, education loan and other expenditures, people with gross income of Rs 6.5 lakh and more will have to pay no tax. This gave the impression that the threshold exemption limit had gone up to Rs 5 lakh.