How to pay zero tax on income of upto Rs 10 lakh, thanks to Piyush Goyal’s budget

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After today’s interim budget announcement, a person earning upto Rs 10 lakh can pay zero income tax with smart financial management.

New Delhi: In a relief to middle-class taxpayers, Finance Minister Piyush Goyal announced full tax rebate for income up to Rs 5 lakh per annum. Those earning upto Rs 6,50,000 will not need to pay tax if they invest in specific schemes such as the Public Provident Fund and prescribed equities.

This could benefit as many as 30 million taxpayers, the minister said, adding that those earning more will be taxed at the prevailing rates.

Goyal also announced an increase in the standard deduction, which provide for employee expenses, from Rs 40,000 to Rs 50,000. Benefits from the standard deduction are extended without any proof of expense.

These sops, combined with the other goodies announced, mean that anyone earning up to Rs 10 lakh can walk away with Rs 0 tax payable if they just plan smartly. Here’s how:

 

And, for a family of three comprising husband, wife and a senior citizen, this may result in almost no tax till a combined income of Rs 25 lakh per year.

Economists expect the measure to free up income in the hands of the people, providing a major consumption boost to the economy.