5 new Income Tax changes that may impact you soon

Budget 2019: Even as Finance Minister Nirmala  Sitharaman has kept the income tax slab rates unchanged in her first budget presentation, the annual document contains several provisions that could impact taxpayers. The Budget analysis by State Bank of India (SBI) research team has pointed out the major proposals of the budget that will impact many taxpayers. These proposals are:

1. Aadhaar and PAN would be made interchangeable for tax-filing purpose. 

SBI Research said that this decision will help increase the tax base in the country and benefit crores of individuals who don’t have a PAN, but have Aadhaar. 

In India, there are around 45 crore PAN card holders, while 120 crore Indians have Aadhaar Card. 

Banks will also benefit from the decision. "From banks’ perspective, interchangeability of PAN and Aadhaar would ease the operational aspect," SBI Research said. 

2. Income tax deduction of Rs 1.5 lakh on home loans for affordable houses costing below Rs 45 lakh. 

SBI Research document said, "This benefit will be available for home loans taken till March 2020. Cumulatively, the interest paid on home loan deduction will go up to Rs 3.5 lakh, from the current Rs 2 lakh for self-occupied house property. This is applicable only to the individual who don’t own any residential house property on the date of sanction of loan.

3.   Rs 1.5 lakh income tax deduction on interest paid on loans for purchase of electric vehicles. 

SBI Research said, "This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicle."

4. Increased income tax surcharge for HNIs (high net worth individuals) earnings more than Rs 2 crore a year. 

"Those earning between ₹2-5 crore will have shell out 3% more, with surcharge rate being increased from 15% to 25%. Those earning above ₹5 crore will have to shell out a surcharge of 37%, from current 15%."

5. Lower rate of 25% Corporate Tax has been extended to all companies with annual turnover up to Rs 400 crore.

SBI Research said that currently, "this rate is only applicable to companies having annual turnover up to Rs 250 crore. This will cover 99.3% of the companies."