Budget 2020: These changes have so far taken place in the income tax area during Modi’s government tenure

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On February 1, 2020, Finance Minister Nirmala Sitharaman presented her second budget. In his longest budget speech, he tried to cater to the youth, from farmers to young people, but what most expected from the 2020 budget for working or middle-income people was an increase in the income tax exemption limit. This time Nirmala has given Sitharaman two kinds of plate options for the taxpayers. Let’s take a look at the changes that have happened in the field of income tax during Modi’s government tenure.

2014: Income tax exemption limit increased from Rs 2 lakh to Rs 2.5 lakh

Finance Minister Arun Jaitley presented the Modi government’s first budget to a landslide victory in the 2014 Lok Sabha elections. Jaitley increased the income tax exemption from Rs 2 lakh to Rs 2.5 lakh. For seniors, this limit was increased from 2.5 lakhs to 3 lakhs. At the same time, there was no change in the tax exemption limit (Rs 5 lakh) for 80 years and older. The exemption limit below 80C has been increased from Rs 1 lakh to Rs 1.5 lakh while for home loans the limit has been increased from Rs 1.5 lakh to Rs 2 lakh.

2015: Additional deduction of Rs 50,000 on investment in NPS

The Modi government’s second budget also included a reduction in income tax. The health insurance limit has been increased from Rs 5,000 to Rs 25,000 for tax exemption and from Rs 20,000 to 30,000 for seniors. Not only this, in this budget an exemption was also granted in the exemption for transport allowance. It was increased from Rs 800 to Rs 1,600 per month. In this budget, Finance Minister Arun Jaitley also announced an additional exemption of Rs 50,000 for investments in NPS below 80 CCD. At the same time, the surcharge for people with an income above one crore was increased from 10 percent to 12 percent.

2016: Huge increase in house rent tax exemption

In the Modi government’s third budget, Finance Minister Arun Jaitley increased the tax credit under 87A from Rs 2,000 to Rs 5,000. This was for those people with an annual income of more than 5 lakhs. At the same time, the tax exemption on house rent available under 80GG has been increased from Rs 24,000 to Rs 60,000 per annum. Also this year, the surcharge on those who earn one crore annually was increased and increased from 12% to 15%.

2017: Changes in tax brackets

Tax plates were changed in the Modi government’s fourth budget. In the 2.5 lakh – 5 lakh slice, the tax rate was reduced from 10% to 5%, bringing a total benefit of 12,500 to the people of this income group. The Finance Minister increased the tax exemption limit under 87A from Rs 2,500 to Rs 5,000. This exemption was for those taxpayers with an annual income of up to 3.5 lakhs. As for the surcharge, the tax on people earning between 50 lakh and one crore per year was reduced to 10%.

2018: Take advantage of various discounts

The Modi government’s fifth budget allowed a standard deduction of Rs 40,000 and reimbursement of miscellaneous medical expenses in lieu of the existing exemption in transportation allowance, thus benefiting the taxpayer Rs 5,800. In this budget, the limit for medical expenses for seniors has been increased from Rs 30,000 to Rs 50,000.

At the same time, for seniors, the exemption limit for interest on post office deposits was increased from Rs 10,000 to Rs 50,000. Jaitley also proposed replacing the existing 3% education tax on personal and corporate income taxes with a 4% ‘health and education tax’ to meet the education and health needs of poor and rural households. In this budget, the tax on long-term capital gains (more than a lakh) has been reduced to 10%.

2019: Income up to 5 lakh tax free

It was an election year and this budget was presented by Acting Finance Minister Piyush Goyal. In this interim budget, the middle class was considerably relieved in income tax. Income up to Rs 5 lakh was tax exempt. However, there was no change in the tax bracket.
At the same time, the standard deduction for wage earners was increased from 40000 to 50000. An increase of Rs 10,000 in standard deduction will result in an increase of Rs. 3,000 tax savings. After this, Finance Minister Nirmala Sitharaman in the Modi 2.0 government presented the full budget in which no changes were made to the tax structure.

2019-20: Double Plate Option in Income Tax

On February 1, 2020, Finance Minister Nirmala Sitharaman presented her second budget. People from the working or middle-income group had the highest expectations from the 2020 budget about increasing the income tax exemption limit. The new income tax regime will be optional, taxpayers will have the choice between the old or the new system. Income up to Rs 2.5 lakh remains tax free. Income of Rs 2.5 lakh to Rs 5 lakh will draw income tax at the rate of five percent but after exemption, income up to Rs 5 lakh will not be taxed. The new income tax regime will be optional, taxpayers will have the choice between the old or the new system. That is, this change is with the conditions. For this you have to waive the benefit of investment deduction. If you make use of the investment exemption, the old tax rate applies. That is, the profit of about 78 thousand rupees is possible for the person who earns 15 lakh rupees annually.