Budget 2019 expectations: Personal tax changes Expected in Budget 2019:
Today Finance Minister Piyush Goyal will present the interim Budget in Parliament today. This is the Final Budget of NDA government of its term.
It is expected that the government may announce some tax relief for the middle or lower income groups. But sometax expertsdont expect the finance minister to announce sweeping changes on the income tax front, especially before the release of Direct Tax Code report, due on February 28.
It is important to notify the tax rates because without notifying tax rates, the government cannot collect taxes during the intervening periodfrom April 1 to the next full-scale budget after the new government is sworn in.
Here are some expectations from Budget 2019 on personal tax front:
Increase in Basic Income Tax Limit:
There are expectations that the government may increase the basicincome taxexemption limit. Basic exemption limit may be raised from Rs. 2.5 lakh to Rs. 3 lakh for individuals less than 60 years, says Kuldip Kumar, partner at PwC India. For individuals 60 years or more but less than 80, the limit may go up to Rs. 3.5 lakh from Rs. 3 lakh, he says.
Increase in Section 80C Deduction Limit
The government may also increase the Section 80C deduction limit. The limit of Rs.1.5 lakh under Section 80C was last revised in Budget 2014-15. We can expect the government to consider revising this limit
Personal income slab rate should be reduced to 25% from present 30%
A decision may also be taken to lower the highest personal income tax rate from the existing 30% to 25%,”. Currently, income up to Rs. 2.5 lakh is exempt from personal income tax. Income between Rs. 2.5 and Rs. 5 lakh attracts 5% tax, while that between Rs. 5 lakh and Rs. 10 lakh is levied with 20% tax. Income above Rs.10 lakh is taxed at 30%.
Offer more tax benefits on Housing loans
The government may also offer more tax benefits on housing loans. Considering a delay in housing projects and also the inching up of interest rates, interest on housing loan for a self-occupied house property, which is limited to Rs. 2 lakh, may be enhanced to Rs. 2.5 lakh and the set-off cap of adjusting loss from house property against other heads of income may also be accordingly raised from Rs. 2 lakh to Rs. 2.5 lakh,” says Kumar of PwC.
Industry chamber CII has urged the government to double the income tax exemption threshold to Rs 5 lakh and increase the deduction limit under Section 80C to Rs 2.50 lakh to increase savings in the Union Budget.

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