Budget 2019: How to pay zero tax for salary upto Rs. 10 Lakhs?


The Interim Budget, 2019 introduced proposals for the salaried taxpayers which can be availed in the Financial Year 2019-20. If one plans smartly, he can earn tax free income up to Rs. 10 lakhs. Further, if a person possesses two house and is paying taxes on notional rent, as the second is deemed to be let-out by the Income-tax Act, this budget proposes some changes to cheer him up.

Budget effect on your pocket can be understood below:

Ms. Saachi, a salaried class taxpayer, earns taxable salary income of Rs. 10 lakhs both in Financial Year 2018-19 and 2019-20. She has two houses, in Kolkata and in her home town Bikaner, but she stays in Kolkata house. She has to assume that one of the houses is deemed let-out (at Rs. 30,000 per month) as Income-tax Act allows a taxpayer to assume only one house as his/her self-occupied house property. If she plans with little care, after considering the proposals made in Interim Budget, she can eventually reduce the tax on her total income as low as nil.




Particulars

Tax liability

(Pre-Budget)

Tax liability

(Post-Budget)

Income under the head Salary                       

Less: Standard deduction

Net Salary                                 

10,00,000

40,000

9,60,000

10,00,000

50,000

9,50,000

Income under the head house property:

Notional rent

Less:

a) Statutory deduction at 30%

b) Interest

Net income/loss

3,60,000

 

(1,08,000)

(2,00,000)

52,000

-

 

-

(2,00,000)

(2,00,000)

Gross total Income

10,12,000

7,50,000

Less: Deductions under chapter VI-A

a) Section 80C

b) Section 80D

c) Section 80CCD

(1,50,000)

(50,000)

(50,000)

(1,50,000)

(50,000)

(50,000)


Total Income

7,62,000

5,00,000

Gross Tax payable

64,900

12,500

Less: Rebate under section 87A

-

12,500

Net Tax payable

64,900

Nil

Health & Education Cess

2,596

Nil

Total Tax payable

67,496

Nil

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ACA Sarita Laddha 
on 04 February 2019
Published in Union Budget
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