The 2019-20 Interim Budget was presented by the Finance Minister of India, Mr Piyush Goyal on February 1, 2019. This interim budget seeks to meet the expenditure for the first six fiscal months of 2019-20. It should be noted that an interim budget is also known as a ‘vote on account.’
The 7 Major Highlights of The budget
1. THE 10 VISIONS BY 2030
- Priority to build next-generation infrastructure, both physical as well as social.
- Digital India.
- Clean and renewable energy.
- Expanding of rural industrialization
- Cleaning of rivers
- Oceans and coastlines
- The gaganyan project, an outer space program
- Self-sufficiency in food
- Ayushman Bharat Scheme
- Minimum Government, Maximum Governance
- For those who have a taxable income of up to INR 5lakh will get a full tax rebate.
- Section 80IBA of the Income Tax Act to be extended for another more year for availing affordable housing.
- No tax on notional rent income on the purchase of the second house.
- 3 crore taxpayers may be beneficiaries.
- INR 18,500 crore is the total tax benefit for taxpayers.
- Those having income up to INR 6.5 lakh may not pay tax if they make investments in provident funds, specified savings, insurance, etc.
- While the tax slabs have been left untouched, Section 87A of the IT Act has been amended to increase the rebate ceiling from INR 3.5 lakh to INR 5 lakh.
3. RENT AND TDS
- Rent up to INR 2.4 lakh exempted from TDS.
- The benefit of capital gains of up to INR 2 crores shall be increased to investment in two residential houses.
- Standard reduction raised from INR 40,000 to INR 50,000.
- Tax Deducted at Source (TDS) on fixed deposits and postal deposits will be exempted for interest earned till INR 40,000. Previously it was INR 10,000.
The salaried class has got some relief with the increase in the standard deduction. The threshold for tax deduction at source on the interest from fixed deposits with banks and post office deposits have been raised from INR 10,000 to INR 40,000.
4. RESIDENTIAL HOUSES
The benefit of the 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 taxpayer having capital gains up to INR 2 crore. This benefit can be claimed only once in a lifetime.
- The rebate has been raised from INR 2,500 to INR 12,500.
- INR 6,000 annual dole (benefit paid by the state) for small farmers. Small farmers are those owning less than 2 hectares of cultivable land.
Piyush Goyal offered direct cash support of INR 6,000 a year which is to be paid in three instalments to small farmers with a landholding of up to 2 hectares to quell the growing farmer unrest over depressed rural incomes. He further said that the government would fork out INR 20,000 crore this financial year for the programme, known as the Pradhan Mantri Kisan Samman Nidhi. The cost in a full year is estimated to be INR 75,000 crore. 12.56 crore farmers are likely to benefit out of this scheme.
- INR 75,000 crore has been allocated for the scheme for the Financial year 2019-20. (Agricultural sector).
- 2% interest subvention for farmers pursuing animal husbandry and fisheries or hit by natural calamities.
- 3% interest subvention for farmers who repay loans on time.
6. UNORGANISED SECTOR WORKERS
- INR 3,000 monthly pension for unorganized sector workers above 60 years against a monthly contribution.
Goyal announced a monthly pension of INR 3,000 for unorganized workers aged above 60 that will cover migrant labor and household help. Under the contributory pension scheme, workers with a monthly income of less than INR 15,000 will have to contribute a small amount until they attain the age of 60. The government has set aside INR 500 crore for the scheme this year.
- A new pension scheme – Pradhan Mantri Shram- yogi maandhan for young workers in the unorganized sector. INR 15,000 will be the monthly income limit for the workers to join the scheme. INR 500 crore has been allocated for the scheme. The monthly amount will vary from INR 55 to INR 100 depending upon the worker’s age.
7. REAL ESTATE AND BUSINESS
- Real Estate developers can hold unsold inventory for 2 years from the date of project completion without paying tax on notional rent.
- Stamp duty to be levied on 1 instrument relating to 1 transaction and will be collected at the stock exchange.
- Renewables to become a major source of energy supply in the next decade.
- 2% interest rebate on an incremental loan of INR 1 crore for GST-registered SME units.
The interim Budget 2019-20 contained elements that are aimed at benefiting three major segments of the population – farmers, informal sector workers, and salaried taxpayers with announcements of an income support scheme for informal sector workers, and tax exemptions for salaried workers.