The 2019 Interim Budget was presented by Piyush Goyal in approximately 1 hour and 45 minutes. With the election year in mind, there was plenty to cheer about. A big package for farmers and a pension plan for the unorganised sector. The middle-class salaried employees will benefit too.
Individual taxpayers with income up to Rs 5 lakh, get a full tax rebate. Which means, NO income tax for taxpayers in this income bracket.
For those touching a gross income of Rs 6.5 lakh, if they conduct relevant investments up to Rs 1.5 lakh investment, they too are exempt from paying income tax.
All those with a higher income can avail of additional deductions, NPS, medical insurance, and so on and so forth. Standard deduction hiked up to Rs 50,000 (up from Rs 40,000).This will provide additional tax benefit of Rs 4,700 crore to more than 3 crore salary earners and pensioners.
Tax related announcements:
- No tax on notional rent on second self-occupied house. The benefit of rollover of capital gains under section 54 of the Income Tax Act will be increased from investment in one residential house to two
residential houses for a tax payer having capital gains up to Rs 2 crore. This benefit can be availed once in a life time.
- TDS threshold for rent increased from Rs 1.8 lakh to 2.4 lakh. Tax on notional rent extended to 2 years.
- Benefits under Sec 80 (i) BA being extended for one more year for all housing projects approved till end of 2019-2020.
- TDS threshold on interest earned on bank/post office deposits raised from Rs 10,000 to Rs 40,000.
- Gratuity limit increased from Rs 10 lakh to Rs 20 lakh.
- Direct tax collections at Rs 12 lakh crore in FY19 from Rs 6.38 lakh crore in 2014. There was 18% increase in direct tax collections in 2017-18 and 1.06 crore people were included in the tax base.
- All returns to be processed within 24 hours and refund simultaneously. 99.54% income tax returns were filed online in 2018.
- Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by officials.
- Businesses with less than Rs 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to return quarterly returns.
Other key announcements:
- Revised fiscal deficit at 3.4% for FY20 and the current account deficit to be contained at 2.5%.
- Poised to become $5 trillion economy in the next five years. Government aspires to become $8 trillion economy in eight years.
- FM confident of reaching disinvestment target of Rs 80,000 crore.
- Capital expenditure target of Rs 3.36 lakh crore for FY20.
- Rs 60,000 crore set aside by MGNERGA in 2019.
- Farmers owning up to 2 hectares to get Rs 6,000 per year in three installments. Budget outlay of Rs 24,000 crore under Pradhan Mantri Kisan Samman Nidhi scheme. Farmer income to double by 2022.
- Pension scheme for the unorganized sector which will pay monthly pension of Rs 3,000 after retirement age of 60. Budget outlay of Rs 500 crore for the same.
- Government to set up 1 lakh digital villages in the next five years.
