Union Budget 2019 – This is How You Pay No Tax With an Annual Income of ₹10,25,000
Last Updated : Feb. 2, 2019, 2:29 p.m.
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.
Tax Slab Before Union Budget 2019
| Income | Tax |
|---|---|
| Up to ₹2.5 lakh | NIL |
| ₹2,50,001 to ₹5 lakh | 5% (total income minus 2.5 lakhs) + 4% cess |
| ₹5,00,001 to ₹10 lakh | 12,500 + 20% (total income minus 5 lakhs) + 4% cess |
| Above ₹10 lakh | 1,12,500 + 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 –
- Investment under sec 80C (ELSS mutual funds, Provident Funds etc) investment of upto Rs. 1.5 lakhs in a financial year
- Tax saving on home loan interest – Rs. 2 lakhs
- Medical insurance for Self/Spouse/Kids Under Section 80D – Rs. 25,000
- Medical insurance for Parents Under Section 80D – Rs. 50,000
- NPS Under Section 80CCD – Rs. 50,000
As per Union Budget 2019, he will get full tax rebate, let us see how.
| Particulars | Pre-Budget 2019 | Post-Budget 2019 |
|---|---|---|
| Annual Income | 10,25,000 | 10,25,000 |
| Standard Deduction | 40000 | 50000 |
| Home Loan Interest | 2,00,000 | 2,00,000 |
| Investment under sec 80C (ELSS mutual funds, Provident Funds etc) | 1,50,000 | 1,50,000 |
| 80D - Medical Insurance Self/Spouse/Kids | 25000 | 25000 |
| 80D - Mediclaim Parents | 50000 | 50000 |
| NPS - Section 80CCD (1B) | 50000 | 50000 |
| Taxable Income | 5,10,000 | 5,00,000 |
| Taxes to be Paid Including Education Cess | Upto 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 Payable | 15,080 | NIL |
*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.