Interim Budget 2019: Friday, 01 February 2019
The Interim Budget presented by Piyush Goyal is the last Budget of the NDA government led by Prime Minister Narendra Modi before the Lok Sabha elections due by May 2019. Goyal, who has been given charge of the finance portfolio in place of Arun Jaitley who is in the US for medical treatment.
The Modi government today unveiled an interim budget with mega announcements for middle class, rural citizens, farmers and unorganised sector workers. Keeping an eye on the Lok Sabha polls, government made a slew of announcements to keep everybody happy with tax sops for salaried class, direct income for farmers and other social sector schemes.
Union Finance Minister has started the Interim Budget 2019 speech amid ruckus by the Opposition in Parliament. Piyush Goyal, a Chartered Accountant, began his first Budget speech by recounting the initiatives taken by the Narendra Modi government in its four-year tenure at the Centre. He added that the fiscal deficit has been brought down to 3.4% of GDP in the revised estimate of 2018-19 and India is moving towards building a New India by 2022. He concluded with the remark that it is not merely an Interim Budget, but a medium of the country’s development journey and ‘Development’ has become a mass-movement during the tenure of Modi Government.
The key highlights of Interim Budget 2019 are as follows:-
- The Simplification of Direct Tax system resulted into increase in tax collections significantly from INR 6,38,000 Crores in 2013-14 to almost INR 12,00,000 Crores this year and also the number of returns filed have increased from 3.79 Crores to 6.85 Crores showing 80% growth in tax base.
- It was first time ever that any Union Finance Minister has thanked all taxpayers for their valuable contribution to nation building and for providing a better life to the poor and marginalized sections of society.
- All Assessment and verification of the Income Tax returns will be done electronically by an anonymised tax system without any intervention by tax official within almost two years to bring transparency in the system and to save lots of hardship to taxpayers.
- A Standard Deduction under Section 16(ia) of The Income Tax Act, 1961 is being raised from the current INR 40,000/- to INR 50,000/- which will result in tax benefit of INR 4,700 Crores to more than 3 crores salary earners and pensioners.
- Though there is no change in Tax slabs of an Individual, the tax relief is given to an Individual assessee having total income upto INR 5,00,000/- by way of proposed amendment to Section 87A of The Income Tax Act, 1961. Such assessee shall be entitled to a deduction of an amount equal to 100% of such income-tax or an amount of INR 12,500/-, whichever is less.
- It is proposed to exempt levy of income tax on notional rent on a second self-occupied house by way of proposed amendment to Section 23 of The Income Tax Act, 1961 as currently income tax on notional rent is payable if an assessee has more than one self-occupied house.
- The benefit of rollover of capital gains under Section 54 of The Income Tax Act, 1961 will be increased from investment in one residential house to two residential houses for a tax payer having capital gains up to INR 2 crores. This benefit can be availed once and cannot subsequently exercise the same.
- The benefit of deduction of an amount equal to hundred per cent of the profits and gains derived from the business of developing and building housing projects under Section 80-IBA of The Income Tax Act, 1961 is being extended for one more year i.e. to the housing projects approved by the competent authority till 31st March, 2020.
- The TDS threshold on Interest earned on bank/post office deposits is being raised from INR 10,000/- to INR 40,000/- by way of proposed amendment to Section 194A(3)(i) of The Income Tax Act, 1961.
- The TDS threshold for deduction of tax on rent is proposed to be increased from INR 1,80,000/- to INR 2,40,000/- for providing relief to Small taxpayers by way of proposed amendment to Section 194I of The Income Tax Act, 1961.
- GST aims to benefit small traders, manufacturers and service providers and hence, an exemption from GST is granted to small businesses by increasing the turnover limit from INR 20,00,000/- to INR 40,00,000/-.
- Banking Reforms: A number of measures have been implemented to ensure Clean Banking and recognition of NPAs through a transparent and accountable process. The Insolvency and Bankruptcy Code (IBC) is one of the reforms which helped in recovery of non-performing loans while preserving the underlying businesses and jobs.
- Cleanliness: The India has achieved 98% rural sanitation coverage with the help of Swachh Bharat Mission and it has become a national movement from just a Government Scheme.
- Pradhan Mantri Gram Sadak Yojana (PMGSY) is being allocated INR 19,000 Crores in 2019-20 and a total number of 1.53 Crores houses have been built under the Pradhan Mantri Awas Yojana.
- Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) programme is launched to provide an assured income support of INR 6,000/- per year in three instalments to the small and marginal farmers at an estimated cost of INR 75,000 Crores.
- It is proposed to provide the benefit of 2% Interest subvention to the farmers pursuing the activities of animal husbandry and fisheries, who avail loan through Kisan Credit Card Scheme [KCC].
- It is proposed to launch a mega pension yojana namely Pradhan Mantri Shram-Yogi Maandhan for the unorganised sector workers with monthly income upto INR 15,000/-. This pension yojana shall provide them an assured monthly pension of INR 3,000/- from the age of 60 years on a monthly contribution of a small affordable amount during their working age.
- A National Artificial Intelligence portal will be developed as a part of a National Programme on ‘Artificial Intelligence’ in order to take the benefits of Artificial Intelligence and related technologies to the people of country.
- Empowering MSMEs: A scheme of sanctioning loans upto INR 1 crore in 59 minutes has been launched to strengthen MSME sector. Also, GST registered SME units will get 2% interest rebate on incremental loan of INR 1 Crore and additional 3% interest subvention on timely repayment of loan.
- In order to secure our borders and to maintain preparedness of the highest order, Defence Budget is estimated at INR 3,00,000 Crores for the first time in 2019-20.
- The Capital support from the budget for Railways is proposed at INR 64,587 Crores in 2019-20. The Railway’s overall capital expenditure programme is of INR 1,58,658 Crores.
- The Single window clearance for ease of shooting films will be available not only to foreigners but also to Indian filmmakers to promote entertainment industry.
- Demonetisation and Drive against Black Money: The anti-black money measures have brought undisclosed income of about INR 1,30,000 Crores to tax, led to seizure and attachment of assets worth approximately INR 50,000 Crores, and compelled holders of large cash currency to disclose their source of earnings. During this period, Benami assets worth INR 6,900 Crores and foreign assets worth INR 1,600 Crores have been attached.
– CA Pratik Bhavsar [firstname.lastname@example.org]