Modi government’s Budget 2019 income tax announcements a boon for Indian Railways and Coal India Limited employees! Union Finance Minister Piyush Goyal, who is also the Railways Minister, on February 1, gave major tax relief to middle-class salaried individuals by announcing the extension of tax relief under Section 87A. Piyush Goyal announced that individuals whose total income does not exceed Rs 5,00,000 per annum will not have to pay any tax. The Section 87A, as of now, provides relief of up to Rs 2,500 for individuals whose income is less than Rs 3,50,000. The FM also raised the standard deduction limit by Rs 10,000 to Rs 50,000.
Sources told Financial Express Online that over 5.5 lakh Indian Railways employees will benefit from this new rule as they are earning below Rs 5 lakhs. Similarly, Coal India’s over 38,000 employees will benefit from this tax rebate, according to sources. While the national transporter is one of the biggest employers in the country with almost 12 Lakh people under Indian Railways, CIL is also one of the biggest public sector units in terms of employee headcount.
The FM also announced that because of this rebate “even employees having gross income up to Rs 6.50 lakhs may not be required to pay any income tax if they make investments in provident funds, specified savings, insurance, etc.” Sources told Financial Express Online that this will further benefit Over 2.6 lakh Indian Railways employees taking the total number of Indian Railways employees benefiting from new Income Tax rebate rule to over 8 lakh. Coal India’s over 36,000 employees will also get similar benefits.
Goyal further said that with additional deductions such as interest on home loan up to Rs 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance, medical expenditure on senior citizens, etc., persons having even higher income will not have to pay any tax. “This will provide tax benefit of Rs 18,500 crore to an estimated 3 crore middle class taxpayers comprising self employed, small business, small traders, salary earners, pensioners and senior citizens,” Goyal said.
The FM also announced that with the Standard Deduction for salaried individuals being raised from the current level of Rs 40,000 to Rs 50,000 benefitting more than 3 crore salary earners and pensioners.