New Delhi: Dashing expectations, Finance Minister Nirmala Sitharaman in her maiden budget on Friday offered little relief for taxpayers with annual incomes up to Rs 5 lakh. She, however, proposed an income tax exemption of Rs 1.5 lakh on loans taken for e-vehicles.
Here are the income tax reforms that FM Nirmala Sitharaman’s proposed in her maiden Budget.
Additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to buy electric vehicles. “This leads to a benefit of Rs 2.5 lakh crore over the tax period of the loan for the loan payer,” said Nirmala Sitharaman.
Taxpayers with annual incomes between Rs 2 crore to Rs 5 crore will now pay a surcharge of 3%. The income tax on incomes of Rs 5 crore and above will also be increased by 7 %.
Additional Rs 1.5 lakh deduction has been proposed on interest paid for affordable housing loans till March 2020.
The Budget also proposes to make PAN and Aadhaar interchangeable and allow those who don’t have PAN to file Income Tax Returns by simply quoting their Aadhaar number. Sitharaman told the House that more than 120 crore Indians have Aadhaar and so the proposal intends to make the process more convenient for the tax-payers.
The Budget also proposes faceless tax assessments. “The existing system of scrutiny assessments in the Income-tax Department involves a high level of personal interaction between the taxpayer an the Department, which leads to certain undesirable practices on the part of tax officials,” she said.
It was also proposed that pre-filled tax returns will be made available to taxpayers which will contain details of salary income, capital gains from securities, bank interests, and dividends etc and tax deductions.
The Budget also proposes to levy a TDS of 2 percent on cash withdrawals exceeding Rs 1 crore annually from a bank account.