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Union Budget 2019 – This is How You Pay No Tax With an Annual Income of ₹10,25,000

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Highlights

  • Individuals with annual income up to Rs 5 lakh get full tax rebate under section 87A.
  • Individuals with gross income up to Rs 6.5 lakh who have made investment in provident funds and prescribed equities will pay no tax.
  • Standard deduction increased from Rs. 40,000 to Rs. 50,000.
  • Anyone with taxable income above Rs. 5 lakhs will only get standard deduction benefit.
  • Even salaried people who earn Rs. 10.25 lakhs annually can pay no tax.

In the Union Budget 2019, Finance Minister Piyush Goyal has probably given the best gift to Indian tax payers, especially the salaried middle class. The announcement has been made that individuals upto the gross income of Rs. 5 lakhs per annum will pay no tax as compared to previous applicable tax of 5%. Not only this, those with gross income up to Rs 6.5 lakh need not to pay any tax if they make investments in provident funds and prescribed equities, under sec 80C, which is another good news for the middle class people of India. But, even those who have annual income of Rs. 10.25 lakhs can save themselves from paying tax. To know how, read this.

union budget 2019

Tax Slab Before Union Budget 2019

IncomeTax
Up to ₹2.5 lakhNIL
₹2,50,001 to ₹5 lakh5% (total income minus 2.5 lakhs) + 4% cess
₹5,00,001 to ₹10 lakh12,500 + 20% (total income minus 5 lakhs) + 4% cess
Above ₹10 lakh1,12,500 + 30% (total income minus 10 lakhs) + 4% cess

Note: Standard deduction of Rs. 40,000

Union Budget 2019 – Tax Calculation for Individuals with Annual Income of Rs. 10.25 lakhs

Consider the below investments and deductions which will be reduced from your taxable income –

  1. Investment under sec 80C (ELSS mutual funds, Provident Funds etc) investment of  upto Rs. 1.5 lakhs in a financial year
  2. Tax saving on home loan interest – Rs. 2 lakhs
  3. Medical insurance for Self/Spouse/Kids Under Section 80D – Rs. 25,000
  4. Medical insurance for Parents Under Section 80D – Rs. 50,000
  5. NPS Under Section 80CCD – Rs. 50,000
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As per Union Budget 2019, he will get full tax rebate, let us see how.

ParticularsPre-Budget 2019Post-Budget 2019
Annual Income10,25,00010,25,000
Standard Deduction4000050000
Home Loan Interest2,00,0002,00,000
Investment under sec 80C (ELSS mutual funds, Provident Funds etc)1,50,0001,50,000
80D - Medical Insurance Self/Spouse/Kids2500025000
80D - Mediclaim Parents 5000050000
NPS - Section 80CCD (1B)5000050000
Taxable Income 5,10,0005,00,000
Taxes to be Paid Including Education CessUpto 2,50,000 - NIL

From 2,50,000-5,00,000 @ 5% of total income minus
2,50,000 + 4 % cess
= 12,500 + 4% of 12,500 = 13,000

From 5,00,000-5,10,000 @ 20% of 10,000 + 4% cess
= 2,000 + 4% of 2,000
= 2,080
Upto 5,00,000 - NIL
Total Tax Payable15,080NIL

*Disclaimer – This is indicative on basis of interim budget speech and subject to change as and when we receive any updated information on the subject.

As you can see above, you would also end up saving Rs. 15,080 per year which is again a win-win situation for the taxpayers.

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Personal Loan Interest Rates October 2019
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank11.25% - 21.45%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank11.50% - 18.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates October 2019
State Bank of India/SBI8.15% - 8.80%
HDFC8.25% - 9.30%
LIC Housing8.35% - 8.95%
PNB Housing Finance9.25% - 12.00%
Piramal Capital & Housing Finance9.00% - 9.10%
Tata Capital9.20% - 9.35%
ICICI Bank9.20% - 9.65%
Bank of Baroda8.40% - 9.40%
Axis Bank8.90% - 9.15%
Citibank9.00% - 9.85%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank8.90% - 8.75%
DHFL9.05% - 9.95%
Reliance Home Finance8.75% - 14.00%