Budget 2021: Crucial Income Tax Changes In Past Budgets

The government has made some drastic changes in income tax rules over the years, ranging from changes in income tax rates to reintroduction of standard deduction and a higher income threshold for rebate

Budget 2021: Crucial Income Tax Changes In Past Budgets

Finance Minister Nirmala Sitharaman will present Union Budget for 2021-22 on February 1

Finance Minister Nirmala Sitharaman will present the Union Budget for 2021-22 on February 1. Just like every year, financial experts and the common man will eagerly await announcements on the taxation front. The government has made some drastic changes in income tax rules over the years, ranging from changes in income tax rates to reintroduction of standard deduction and a higher income threshold for rebate, and the upcoming budget may be no different.

Here's a brief description of key tax changes announced in the Union Budget since 2014:

Budget February 2020

  • A new and simplified personal tax regime consisting of revised income tax slabs and tax rates
  • Under the new tax structure, people earning Rs 5-7.5 lakh will have to pay just 10 per cent, while those earning up to Rs 5 lakh annually will pay no tax.

Budget June 2019

  • TDS (tax deduction at source) of 2 per cent to be applicable for cash withdrawals exceeding Rs 1 crore per year
  • Relief in securities transaction tax (STT)
  • Companies with an annual turnover of Rs 400 crore to come under the tax bracket of 25 per cent

Budget February 2019

  • Individual taxpayers with annual income up to Rs 5 lakh to enjoy full tax rebate
  • No tax on income up to Rs 5 lakh a year
  • No tax on income of Rs 5 lakh-Rs 6.5 lakh, in case of investments
  • Standard deduction increased from Rs 40,000 to Rs 50,000
  • TDS threshold on interest from bank deposits and postal savings raised from Rs 10,000 to Rs 40,000
  • TDS threshold on rental income hiked to Rs 2.4 lakh from Rs 1.8 lakh
  • Capital gains from residential property sale made eligible for exemption under Section 54, for up to two properties
  • No income-tax to be applicable on notional rent on second self-occupied home

Budget 2018

  • Hike in cess from 3 per cent to 4 per cent
  • Standard deduction of Rs 40,000 for salaried individuals
  • For senior citizens
  • Exemption of interest income on bank/post office deposits raised from Rs 10,000 to Rs 50,000
  • Deduction limit for health insurance premium/medical expenditure increased from Rs 30,000 to Rs 50,000, under section 80D of Income Tax Act

Budget 2017

  • Reduction in income tax rate on income of Rs 2.5 lakh-5 lakh, from 10 per cent to 5 per cent
  • Rebate under Section 87A reduced from Rs 5,000 to Rs 2,500; no rebate on income above Rs 3.5 lakh
  • Surcharge of 10 per cent on income of Rs 50 lakh-Rs 1 crore
  • Penalty up to Rs 10,000 for failure to file returns on time (not more than Rs 1,000 on income up to Rs 5 lakh)
  • Abolition of deduction on investment in Rajiv Gandhi Equity Saving Scheme

Budget 2016

  • Increase in surcharge from 12 per cent total income to 15 per cent, over Rs 1 crore
  • Tax rebate for individuals with income up to Rs 5 lakh, raised from Rs 2,000 to Rs 5,000
  • Additional deduction up to Rs 50,000 on interest payment for first-time home loan borrowers (over and above Rs 2 lakh)

Budget 2015

  • Wealth tax abolished
  • Surcharge on income above Rs 1 crore increased to from 10 per cent to 12 per cent

Budget 2014

  • Income tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh (Rs 3 lakh for senior citizens)
  • Exemption limit for investment in financial instruments under Section 80C of the Income Tax Act
  • Deduction limit on interest on loan for self-occupied house hiked from Rs 1.5 lakh to Rs 2 lakh