Budget 2019: No question of breaking convention, taxpayers need certainty, says revenue secretary

In a major relief for the salaried class, finance minister Piyush Goyal announced full tax exemption for income up to Rs 5 lakh per year. Individuals falling under the said tax slab will get full tax rebate.

He further added that all the direct tax relief measures will be applicable from April 1 of the current fiscal year.

The government said it will increase the exemption limit for income tax paid by individuals from the current Rs 2.5 lakh to Rs 5 lakh, providing major relief to salaried class. This translates to a benefit of Rs 18,500 crore to more than 3 crore taxpayers.

The government has introduced the bill in the parliament to continue the existing rates and also provide some tax relief particularly to low-income earners, middle class, senior citizens, pensioners, small traders and businesses, Pandey said.

On expected revenue loss, Pandey said, “I wouldn’t say this is a revenue loss. This much of benefit has been given particularly to the low income earners because what we have seen is that during the last four and a half years, the tax base has increased. Our tax collection has doubled and this is all because of the tax reforms and particularly a large number of middle income earners have come into taxation.”

India set a fiscal deficit target of 3.4 percent of gross domestic product (GDP) for the year ending March 2020, higher than a previous estimate, and also said it would breach the current year's 3.3 percent deficit target.