Income Tax Rebate: Individuals earning upto 8-9 lakhs can avoid paying income tax
New Delhi: Income tax rebate shall not be a dream anymore for individuals earning Rs 8-9 lakh annually, but only if they make the right investments. Revenue Secretary, Ajay Bhushan Pandey, said on Saturday that they can easily invest in the provident fund, life insurance, pension scheme and home loan and avoid paying tax at all.
Union Finance Minister Piyush Goyal presented the Interim Budget for the financial year 2019-20 in Lok Sabha on Friday. The proposed budget gives a full Income tax rebate to individuals having taxable annual income up to Rs. 5 lakh.
“We have given a complete rebate of Income Tax so that people having taxable income of Rs. 5 lakh do not have to pay any tax. Now people having even higher gross income if they make an investment in 80C or if they pay interest on education or home loan, or if they invest in a pension scheme, mediclaim, critical illness then people having much higher income in the range of Rs. 8-9 lakh also can get their taxable income reduced to below Rs. 5 lakh and get an advantage of rebate and not pay any tax,” Mr Pandey told PTI in an interview.
The move would provide relief to middle-class taxpayers comprising self-employed, small businesses, small traders, salary earners, pensioners and senior citizens.
Under Section 80C of I-T Act, a tax rebate is available for investments made in specified instruments like PPF, life insurance, tuition fee, five-year term deposit in banks and Post Office, up to Rs 1.5 lakh in a year.