Highlights of the Union Budget 2019-20.
Total expenditure put in by the budget = INR 27,84,200 crore, an increase of 13.3% from last year’s budget.
Estimated fiscal deficit for 2019-20 = 3.4% of India’s Gross Domestic Product.
Average inflation = 4.6% (brought down).
Mr Goyal also outlined 10 very important dimensions that the govt. seeks to achieve by the year 2030.
- Priority to build next-generation infrastructure, both physical as well as social.
- Digital India.
- Clean and renewable energy.
- Expanding of rural industrialisation
- Cleaning of rivers
- Oceans and coastlines
- The gaganyan project, an outer space programme
- Self-sufficiency in food
- Ayushman Bharat Scheme
- Minimum Government, Maximum Governance
The major highlights of the budget –
- For those who have a taxable income of up to INR 5lakh will get a full tax rebate.
- 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.
- Rent up to INR 2.4lakh exempted from TDS.
- The benefit of capital gains of up to INR 2 crores shall be increased to investment in two 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.
- Section 80IBA of the Income Tax Act to be extended for another more year for availing affordable housing.
- The rebate has been raised from INR 2,500 to INR 12,500.
- INR 6,000 annual dole 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 in an effort to quell the growing farmer unrest over depressed rural incomes. He further said that the government will 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).
- INR 3,000 monthly pension for unorganised sector workers above 60 years against a monthly contribution.
Goyal announced a monthly pension of INR 3,000 for unorganised workers aged above 60 that will cover migrant labour 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.
- 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.
- 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.
- A new pension scheme – Pradhan Mantri Shram- yogi maandhan for young workers in the unorganised 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.
- 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.
With the 2019 Lok Sabha elections just a few months away, 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.