People earning upto Rs 9.5 can escape tax liability (Case Study)

The Interim Budget 2019, since it was reported on first Feb is continually being reverse discharges with inquiries. Because of the most recent one Finance Minister Piyush Goyal stated, Now people gaining upto Rs 9.5 can escape charge risk by taking the upside of sparing plans.

You may have just perused and determined assessment saving money on salary upto Rs 5,00,000, Rs 6,50,000 or Rs 7,00,000. Be that as it may, astonished to run over this new figure of Rs 9,50,000? Truly, this is conceivable with putting resources into a portion of the prominent assessment sparing roads.

Give us a chance to comprehend this with the assistance of a contextual analysis.

Mr. Win having a yearly compensation of Rs 9,50,000 makes following duty sparing speculations:

Rs 1,50,000 Under Section 80C in different options like LIC, PPF, Home Loan Principal paid etc
Rs 2,00,000 Amounting to the interest paid on home loan during the year
Rs 50,000 For Medical Insurance Premiums Paid u/s 80D

He needs to know his duty risk for the Financial Year 2019-20 (AY 2020-2021).

Give us a chance to compute the assessment obligation of Mr. Win keeping in thought the accompanying proclamations made in Interim Budget 2019:

  • Increment in the utmost of Standard Deduction from the current Rs 40,00 to Rs 50,000 in FY 2018-19.
  • The point of confinement of Rebate u/s 87A upgraded from Rs 2,500 to Rs 12,500.
Particulars Amount (Rs)
Gross Total income from Salary 9,50,000
Less: Loss From House Property 2,00,000
Less: Standard Deduction 50,000
Less: Deduction u/s 80C 1,50,000
Less: Deduction u/s 80D 50,000
Taxable Salary 5,00,000
Less: Basic Exemption Limit 2,50,000
Tax on remaining Rs 2,50,000 @ 5% 12,500
Less: Rebate u/s 87A 12,500
Net Tax Payable NIL

*Above salary and conclusion figures have been assumed by the author and may contrast from case to case.

You can escape charge even on higher salary limits. This should be possible by putting resources into some different alternatives like NPS and so forth or just in the event that you have taken any instruction credit amid the year or made any gifts.