As you know government of India recently launched Yearly Budget 2019 and people are calling it as election budget, so we will discuss all the benefits for the middle class and how will it benefit us.

why this budget got a name election budget?
Let me tell you, This budget is providing lots of benefits to the middle class families and around 45% of Indian population belong to middle class. So it will benefit the ruling party in elections.



Benefits


  • There will be no tax on taxable Income up to ₹5 lakhs: let's discuss this point briefly, so if a person have taxable Income up to 5 lakhs even after savings then there will be no Income tax on it. But if after all the investment benefits the income is above ₹5 lakhs then tax slabs will be as it is applicable. It is to be assumed that it will benefit around 3 crore people.

  • Standard deduction increased from ₹40000 to ₹50000.

  • Notional Rent Income on second property Abolished: Earlier If you have a second property then you had to show it as your income you paid tax on it but now there will be no tax on second property. Nowadays people are living in different cities so it will benefit those who have 2 residence property, maybe in one parents are living so it's a good step by the government.

  • No TDS on FD interest in Bank and Post office up to ₹40,000 P.A. : In 2019 budget government extended the limit of Interest Income from ₹10,000 to ₹40,000. So if you have an interest on your Fixed deposit less than ₹40,000 then there will be advance tax on it. For example, If you invested 2-3 lakhs in a FD for a fixed period and during the time of maturity the Interest return is below ₹40,000 then government will not charge advance tax on it. However, you will have pay tax on annual return.

  • Capital gains can be invested in 2 residential properties: If you sold one of your property, there was no tax on purchase of one property but now it is extended from 1 to 2 residence properties, so if you have capital gains by selling a property, with that amount you can buy 2 properties without any capital gains tax and the limit for this capital gain tax is ₹2 crores and once in a life time. For example, you purchased a property for 10 lakhs and now it's value is 40 lakhs so you can buy 2 properties without any tax on it. But will charge tax on more than 2 properties.

  • No TDS by non-individuals on rent up to ₹2,40,000 p.a. : If you are depend upon rental income then there will be no TDS up to ₹2,40,000 p.a.. It is extended from 1,80,000 p.a. to ₹2,40,000 p.a.. 

  • Tax free Gratuity limit extended from ₹10 lakhs to ₹30 lakhs: If you are working in an organisation for more than 5 years, a gratuity is created, so earlier gratuity was ₹10 lakhs which is now extended to ₹30 lakhs.

So these all are tax benefits for middle class families, which is quite beneficiary.

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