From Monday, look out for these I-T changes

From Monday, look out for these I-T changes

The salaried class of the country will be eagerly waiting for the next financial year, as the incumbent government has doled out populistic reliefs for the common man in this year's Budget. 

DH brings to you the list of income tax changes that will impact your pockets going forward.

The then interim finance minister Piyush Goyal, in this year's interim budget, announced that individuals with a taxable income of up to Rs 5 lakh will get a rebate. If planned wisely, the move could theoretically mean that somebody earning Rs 9.75 lakh per annum need not pay tax, with all the deductions.

In the Budget, the standard deduction available to individual taxpayers was also increased to Rs 50,000 from the existing level of Rs 40,000.

Also, the threshold for tax withholding on interest (other than interest on securities) was raised to Rs 40,000 from the current level of Rs 10,000. Similarly, the current threshold for tax withholding on rent is increased from Rs 180,000 to Rs 2,40,000.

A withholding tax is an amount that an employer withholds from the employees' wages and pays directly to the government. The amount withheld is treated as a credit against the income taxes the employee must pay during the year. 

Also, the Budget said that individuals can claim up to two properties as self-occupied property. The current requirement is to consider the second property as deemed to be let out.

"The changes in income tax from the new financial year are favourable for a large section of taxpayers and will give more income in their hands," said Mrin Agarwal, Founder Director, Finsafe India. "With TDS limit on fixed deposits increased, retirees will benefit. Not having to pay tax on notional rent provides relief to homeowners. Essentially, there are benefits for most taxpayers. Hopefully, individuals will use the extra savings prudently," 

However, all these benefits come with a caution. According to sources, the taxmen are slated to use big data to keep a check on evasion, joining an elite club of countries like Belgium, Canada and Australia. The government has already been using big data and data analytics to determine GST frauds.

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