First installment of the advance tax is due on 15th June. Taxpayers have to ensure payment of 15% of anticipated annual tax liability by 15th June. Notably, in the current scenario, rate of Interest on bank FDR & on loan availed from bank is comparatively cheaper as compared to the interest that can be charged by the Income Tax Department. It makes sense to pay the income tax well in time to avoid impact of interest.

1. Rebate under section 87A

Earlier, there was a rebate available for individuals earning annual income up to Rs.  3.5 lakhs. Tax rebate under Section 87A has been enhanced from Rs. 2,500 to Rs. 12,500. Further, it is available only to a resident individual whose total income does not exceed Rs. 5,00,000. HUF is not eligible for any rebate u/s 87A. Individual taxpayer with income up to Rs. 5 lakhs will not be liable for any income tax now. Many taxpayers have formed a wrong notion that the basic exemption limit has been increased to Rs. 5 lakhs.

2. Standard deduction from salary

Salaried taxpayers were eligible for standard deduction of Rs. 40,000. The limit of standard deduction for the salaried class taxpayers has now been increased from Rs. 40,000 to Rs. 50,000.

3. Dilution in the concept of deemed to be let out property

If an individual owns more than one self-occupied house property for self-occupation then only one house property of his choice is treated as self-occupied and its annual value is computed as nil. The other house property is deemed to be let-out (even if it is not actually let out) and is chargeable to tax on notional rent basis.

4. Long Term Capital Gain (LTCG) exemption under section 54 extended to two residential houses:

Any LTCG arising to an Individual or HUF from the sale of residential house property is exempt from tax if such LTCG is invested in another residential house property. Exemption is available only if the amount of LTCG doesn’t exceed Rs. 2 crores. Exemption provision is not worded in such a way that exemption can be claimed up to Rs. 2 crores in case LTCG amount exceeds Rs. 2 crores.

5. TDS on interest income

Interest payment on bank FDR attracts Tax Deduction at Source (TDS) provision. Section 194A deals with deduction of TDS on interest income other than interest on securities like interest on fixed deposits. This section is now amended to provide relief to the senior citizens.

6. TDS on rental income

Threshold limit for deduction of tax at source under section 194-I on rental income has been increased from Rs.1,80,000 to Rs. 2,40,000. One should also keep all the above changes in mind while computing the tax liability & advance tax for the financial year 2019-20. However, this is subject to change by the Final Union Budget to be presented in the Parliament on 5th July, 2019.