Budget 2019 Highlights: Financial package for farmers, tax rebate
The key highlights of the Interim Budget 2019-20 presented by the Union Minister for Finance, Corporate Affairs, Railways & Coal, Shri Piyush Goyal in Parliament today are as follows:
A. Direct Tax proposals
- Full tax rebate for income up to Rs 5 lakh per annum -:
- People having annual earnings up-to Rs 5 lakh, will be exempted from paying Income Tax by way of rebate under section 87A. It is the rebate under section 87A is increased from Rs. 2,500/- to Rs, 12,500/-. Thus the benefit will be to only those taxpayers whose total income doesn’t exceed Rs.5,00,000/-. The moment it exceeds Rs. 5,00,000/- tax will start from Rs. 2,50,000/- at 5% up to Rs. 5,00,000/- and 20% from Rs.5,00,000/- to Rs. 10,00,000/- and 30% above Rs.10,00,000/
- More than Rs. 23,000 crore tax relief to 3 crore middle-class taxpayers
- Standard Deduction to be raised to Rs. 50,000 from Rs. 40,000
- TDS threshold to be raised from Rs. 10,000 to Rs. 40,000 on interest earned on bank/post office
- Existing rates of income tax to continue
- Tax exempted on notional rent on a second self-occupied house.
- Income Tax returns to be processed within 24 hours and refunded simultaneously.
- All assessment and verification of Income Tax returns will be done electronically in the next two years
- Gratuity limit increased from Rs 10 lakh to Rs 30 lakh
- Housing and real estate sector to get boost-:
a. TDS threshold for deduction of tax on rent to be increased from Rs. 1,80,000 to Rs.
b. Capital Gains exemption under Section 54 to be available on two house properties up to Rs. 2 crores.
c. Deduction U/s 80IBA for developers of affordable housing scheme has been extended by one year for projects registered up till March 31, 2020
d. Tax exemption period on notional rent, on unsold inventories, extended from one year to
- Small and medium-sized businesses registered under the GST to get 2 per cent interest subvention on loan of Rs 1 crore.
- Group of Ministers looking at ways to ease GST burden on home-buyers.
- Businesses with less than Rs 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to file quarterly returns.
- The government has lowered customs duty on import of parts and components of such vehicles to 10-15 per cent to promote domestic assembling of electric vehicles.
C. MSME and Traders
- 2% interest subvention on an incremental loan of Rs 1 crore for GST registered SMEs
- At least 3% of the 25% sourcing for the Government undertakings will be from women-owned SMEs
a. Renewed Focus on Internal trade; DIPP renamed to Department for Promotion of
Industries and Internal trade.
- Rs. 60, 000 crore allocation for MGNREGA in BE 2019-20
- Pradhan Mantri Shram Yogi Maandhan scheme to ensure fixed monthly pension to 10 crore
unorganized sector workers
a. Rs 3000 per month after 60 years of age with an affordable contribution of only Rs
100/55 per month. Those who join at 18 years of age will have to contribute a mere Rs 55 per month. The government will contribute equal matching share in the pension account. This scheme will cost the government Rs 500 crore
- Employees’ State Insurance eligibility cover limit has been raised to Rs 21,000 per month from Rs 15,000 per month.
- Workers who suffer grievous injuries will now receive Rs 6 lakh from Rs 2.5 lakh through the Employee Provident Fund Organisation (EPFO)
- 12 crore small and marginal farmers to be provided with an assured yearly income of Rs. 6000 per annum under PM-KISAN
a. An outlay of Rs. 75,000 crore for FY 2019-20 with additional Rs. 20,000 crore in RE 2018-19
- The outlay for Rashtriya Gokul mission increased to Rs 750 crore.
- Rashtriya Kamdhenu Ayog to be set up for sustainable genetic up-gradation of the Cow resources
- New separate Department of Fisheries for the welfare of 1.5 crore fishermen.
- 2% interest subvention to Farmers for Animal husbandry and Fisheries activities; an additional 3% in case of timely repayment.
- Interest subvention of 2% during a disaster will now be provided for the entire period of reschedulement of loan
- 22nd AIIMS to be set up in Haryana.
H. Poor and Backward Classes
- “First right on the resources of the country is that of the poor”: FM
- 25% additional seats in educational institutions to meet the 10% reservation for the poor.
- Targeted expenditure to bridge urban-rural divide & to improve quality of life in villages.
- All willing households to be provided electricity connections by March 2019.
- Defence budget to cross Rs 3,00,000 crore for the first time ever.
- Capital support of Rs.64,587 crore proposed in 2019-20 (BE) from the budget.
- Overall capital expenditure programme to be of Rs. 1,58,658 crore.
- Operating Ratio expected to improve from 98.4% in 2017-18 to 96.2% in 2018-19 (RE) and to 95% in 2019- 20 (BE)
K. Entertainment Industry
- Indian filmmakers to get access to Single window clearance as well for ease of shooting films.
- Regulatory provisions to rely more on self-declaration.
- To introduce anti-camcording provisions in the Cinematograph Act to control piracy.
L. Fiscal Programme
- Fiscal deficit pegged at 3.4% of GDP for 2019-20
a. The target of 3% of the fiscal deficit to be achieved by 2020-21.
- Fiscal deficit brought down to 3.4% in 2018-19 RE from almost 6% seven years ago.
- Total expenditure increased by over 13% to Rs.27,84,200 crore in 2019-20 BE.
- Capital Expenditure for 2019-20 BE estimated at Rs. 3,36,292 crore.
- Centrally Sponsored Schemes (CSS) allocation increased to Rs. 3,27,679 crore in BE 2019-20.
- National Education Mission allocation increased by about 20% to Rs. 38,572 crore in BE 2019-20.
- Allocation for Integrated Child Development Scheme (ICDS) increased by over 18% to Rs. 27,584
crore in BE 2019-20
- The substantial increase in allocation for the Scheduled Castes and Scheduled Tribes –
a. Allocation for SCs increased by 35.6% – from Rs. 56,619 crore in BE 2018-19 to Rs. 76,801
crore in BE for 2019-20
b. Allocation for the STs increased by 28% – from 39,135 crores to BE 2018-19 to Rs. 50,086
crore in 2019-20 BE.
- Government confident of achieving the disinvestment target of 80,000 crores.
- Focus now on debt consolidation along with fiscal deficit consolidation programme
M. Digital Villages
- The Government to make 1 lakh villages into Digital Villages over the next five years.
N. North East
- Allocation to be increased by 21% to Rs. 58,166 crore in 2019-20 BE over 2018-19 BE.
- Arunachal Pradesh came on the air map recently.
- Meghalaya, Tripura and Mizoram came on India’s rail map for the first time.
- Container cargo movement through improved navigation capacity of the Brahmaputra.
O. Vulnerable sections
- A new committee under NITI Ayog to identify all the remaining De-notified nomadic and semi-
- New Welfare development Board under Ministry of social justice and empowerment for development and welfare of De-notified nomadic and semi-nomadic tribes.
- Referring to the spectrum auction and coal block auction, Finance Minister Piyush Goyal has pitched for transparency. He said that the Real Estate Development and Regulation Act of 2016 and Benami Properties Act have shown the central government’s intent for maintaining
Q. For Women
- Finance Minister Piyush Goyal has underscored that the women have been the central government’s top most priority. Out of the total, 75 per cent beneficiaries are under Pradhan Mantri Mudra Yojana. FM Goyal has also said that working women are entitled to 26 weeks of maternity leave. Apart from these, the Pradhan Mantri Matritva Yojana is empowering women across the country.
The key message in the Interim Budget 2019-20
1. Moving towards realizing a ‘New India’ by 2022 –
a. Clean and healthy India with universal access to toilets, water and electricity to all
b. An India where Farmers’ income would have doubled
c. Ample opportunities to youth and women to fulfil their dreams
d. An India free from terrorism, communalism, casteism, corruption and nepotism
Click on the following link to read the complete union budget.