Please clarify the below in detail : (1) As i know Basic exemption limit is 2.5 lakhs and no need to file return if taxable income comes below this in a year . But why is it said that no tax if taxable income in a year is below 5 lakhs ? Is exemption limit is 2.5 lakhs or 5 lakhs and it is very confusing ? (2) It was announced today that a person in india is safe for minimum 5 lakhs rupees for his bank deposits even if that bank becomes insolvent or out of business . Is this guarantee of 5 lakh rupees for each bank account in same bank of one person or for every bank account in every other bank or the limit is per family or what ?
Hi
1. If you have income below 5 lacs, effective exemption limit becomes 5 lacs by way of rebate for income tax on income between 2.5 to 5 lacs. For those having income above 5 lacs, basic exemption limit is 2.5 lacs only.
2. The insurance limit is applicable on per bank per individual. So if you have 2 bank accounts in same bank, it would be 5 lacs. However, if 2 accounts are with 2 different banks, it would be 10 lacs- 5 lacs each bank.
Because if your income is till 5 lakh you get a rebate of 12500 in income tax u/s 87A of income tax act.
You can read this hope it help: https://www.taxontips.com/2019/09/08/no-income-tax-for-income-upto-rs-5-lakh-for-f-y-2019-20/
The limit is for each bank. Say for example a person has 10 lakh in Axis and 10 lakh in HDFC and both become insolvent so he will be insured for 10 lakh i.e. 5 lakh for axis and 5 lakh for HDFC.
If your family members have 5 accounts then this limit will apply for each bank account.
Please clarify assuming the individual in both situations is NRI (non-resident indian) or US Citizen having OCI (overseas citizen of india) Card : (1) Is NRI also not required to pay any tax if his india house rental income (assuming no any other income in india) does not exceed Rs.5 lakh or consider total rent received in india is Rs. 6 lakh and after 30% deduction , it comes Rs. 4.2 lakh ..... so no tax liability but he has to file tax return because his taxable income exceeds basic exemption limit of Rs. 2.5 lakh ? Can i get an idea how much tax he will have to pay if no rebate to him under Sec.87A or any relief for such type of assessees under new budget ? (2) I understand Rs. 5 lakh insurance limit applies per person per bank irrespective of how many accounts the same person has in same bank or different branches of same bank , but what if husband , wife and son all have 3 separate accounts in same bank , will Rs 5 lakh limit guarantee apply to all separately thus total Rs. 15 lakh for family in same bank ?
Its not about this budget earlier also the rebate was available to only resident individual and HUF and so if you are NRI and your income is 5 lakh or even 4.8 lakh you will have to pay tax.
Yes it will be 15 lakh and 5 lakh is the maximum limit, if you have a balance below that then it will be that.
1. No, rebate u/s 87A is not applicable to an NRI. Thus, in a given situation, NRI will have to pay taxes of approx. INR 7800. (I.E. 7500 plus cess)
2. Yes, 5 lac guarantee will be applicable separately. In all, family will get a guarantee of 15 lacs.
Hello,
1. Specifically for F.Y. 2019-20 A.Y. 2020-21, The basic exemption limit is still Rs. 2,50,000, but if the total income is below Rs. 5,00,000, then a rebate of Rs. 12,500 tax is available and making the income up to Rs. 5,00,000 tax free.
2. The limit is per person per bank(i.e. any number of accounts with the same bank, also considering merging of banks).
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
1. Rebate under Sec. 87Q is available to resident individuals only. The estimated tax payable by the NRI on rental income would be Rs. 8840 (8500+cess)
2. Since the limit is per person. All three individuals of the family will get Rs. 5 Lakhs limit.
Dear Sir,
Hope you are doing well !!
1. The basic exemption limit is 2.5 lakhs only.
However, you can claim the rebate of all tax payable if your taxable income is up to Rs 5 lakh under section 87A in your ITR when you file it.
2. The insurance limit is applicable on per depositor per bank.
1. No, this rebate is applicable only to Indian residents.
2. Yes, your understanding is correct.
Rs 5 lakh limit guarantee will apply to all separately thus total Rs. 15 lakh for family in same bank.