'No tax for annual income upto Rs 5 lakh, says Piyush Goyal

New Delhi, Feb 01: Finance Minister Piyush Goyal on Friday proposed to increase income tax exception limit to Rs 5 lakh. For the current financial year, the income tax slabs will be the same.

"Individual taxpayers with annual income up to 5 lakh rupees to get full tax rebate, finance minister Piyush Goyal announed during budget 2019," Piyush Goyal said in a major announcement as people in Parliament cheered.

"So people earning up to Rs 6.5 lakh may not have to pay tax if they make investments in specified savings. This will provide tax benefit of Rs 18,500 crore to 3 crore people," he added. Around 3 crore middle class taxpayers will get tax exemption due to this measure, the finance minster said.

''All interest income above Rs 40,000 from bank deposits will now get taxed, and not Rs 10,000. There will be no tax on notional rent on second self-occupied house and no TDS on house rent up to Rs 2.4 lakh,'' said Goyal.

With an eye on upcoming general elections, he also proposed to raise the standard deduction to Rs 50,000.

Among the major sops, Goyal has also announced Rs 6,000 per annum direct cash transfer to farmers owning less than 2 hectares of land. The move, months before general elections, is likely to benefit 12 crore farmers. Rs 60,000 crore has also been set aside for MGNREGA, the rural employment scheme, with Piyush Goyal adding that the allocation can be increased further.

The Finance Minister says a national cow commission for the welfare of cows would also be set up. The gratuity limit has also been increased to Rs 30 lakh.