Terming Narendra Modi government's 2019 interim budget as a statement of intent, Federation of Indian Chambers of Commerce & Industry (FICCI) president Sandip Somany welcomed the new income tax rates.
Making a strong re-election pitch, the BJP-led NDA government announced the biggest income tax sops for middle class, including complete exemption for income up to Rs 5 lakh, and Rs 6,000 annual cash dole to poor farmers in a scheme that will cost Rs 75,000 crore per year.
Converting a vote on account speech into an almost full- fledged budget announcement in Lok Sabha, Finance Minister Piyush Goyal proposed an array of incentives for both middle class and farmers, whose disenchantment was said to have cost the BJP dearly in recent assembly elections.
Over three crore salaried class, pensioners, self- employed and small businesses will save Rs 18,500 crore in income tax annually after the exemption limit was doubled to Rs 5 lakh for the next fiscal from current Rs 2.5 lakh.
Also, standard deduction was raised to Rs 50,000 from current Rs 40,000. TDS threshold on interest from bank and post office deposits has been raised from Rs 10,000 to Rs 40,000.