Payroll Updates from the Union Budget 2019
Dear customers,
With the Union Budget 2019, the Government of India has introduced few changes pertaining to payroll. These changes are designed to reward the employees for their investments in housing and electric vehicles (EV). Let’s take a look at each of them.
Tax deduction for affordable home buyers
Previously, an individual who has taken a home loan can claim deduction for the interest portion of the EMI up to ₹2 lakh under Section 24. Now, the Government has provided an additional deduction of ₹1.5 lakh on interest paid for affordable house loan of ₹45 lakh or less, borrowed on or before March 31, 2020. That means, home buyers can have deductions on their taxable income up to 3.5 lakh on interest paid on home loans, provided they meet the conditions mentioned under the Section 80 EEA. After interest deduction, affordable home buyers will gain a tax benefit of ₹7 lakh over a loan period of 15 years.
Tax deduction on purchasing EVs
The Government of India is taking initiatives to boost the adoption of green technology that protects our environment. In line with that effort, it is providing an additional income tax deduction of ₹1.5 lakh under Section 80EEB to buyers on loans taken for purchasing EVs. This will provide a tax benefit of ₹2.5 lakh over the loan period. For buyers to be eligible for this tax deduction, they must have taken the loan from a non-banking financial company and the loan must be sanctioned anytime between 1 April 2019 and 31 March 2023.
Surcharge on taxable income increases
The Government has increased the surcharge percentage on individuals who have a taxable income of ₹2-5 crore per annum to 25%, and for individuals who earn above ₹5 crore per annum to 37%.
All these changes that the Government of India has proposed will be implemented in Zoho Payroll swiftly. We will keep you posted as and when we roll out these updates. If you have any questions, feel free to comment below.
Cheers,
Alen J. Abraham
The Zoho Payroll Team
The Zoho Payroll Team