Finance Minister Piyush Goyal on Friday presented the Union Budget where around 3 crore middle class taxpayers would have reason to cheer.
The Modi Government has, targeting the middle class, rolled out a populist budget taking those with an annual income up to Rs 5 lakh out of the tax net. Standard reduction has been raised to Rs 50,000 from Rs 40,000. This would mean that with investments of up to Rs1.5 lakh, those with an annual income of Rs 7 lakh would not have to pay income tax. This is expected to provide benefit of Rs 18,500 crore.
This put to rest whether what the Modi Government was going to present an interim budget or vote-on-account as Lok Sabha elections are round the corner. The Government expects to come to power again or else it be for the next Government to find sources to cover the loss.
TDS threshold on rental income was raised to Rs 2.4 lakh from Rs 1.8 lakh and that on rent has been hiked to Rs 2.4 lakh.
The TDS threshold on interest from bank and post office deposit has been raised to Rs 40,000 from Rs 10,000.
It was during the first year that the government raised the income tax level by Rs 50,000 to Rs 2.5 lakh. But with just two months left for the general election and the poll code of conduct expected soon, it has been the policy of Government's not to meddle with Income Tax slabs which have been ignored by the Modi Government.