Budget 2019 Expectations

Posted By Amritesh
On January 31st, 2019
Comments: 8 responses

Interim Finance Minister Piyush Goyal is slated to present the interim Budget 2019 in the Lok Sabha on 1^st February (Friday), 2019. Since this is the last budget before Lok Sabha elections in 2019, expectations among the Tax Paying individuals is high. However, Government will look to balance between populism and economic reforms. Interim Budget 2019 is expected to focus on providing relief to the Farmers, Salaried Individuals and Small Businesses. Budget is also expected to address the issue of unemployment and generation of jobs for the youth.

Interim Budget Announcements

Income Tax Slabs and Rates For Financial Year 2019-20

As per my opinion, Some of the major expectations from the Budget 2019 have been discussed below.

Basic Income Tax Slab

Individual Tax Payers would expect an increase in the Basic Income Tax Exemption Limit. Currently, Individual Income up to 2.5 lacs (Assessment Year 2019-2020) is exempted from Income Tax. Raise in exemption limit will benefit individual as the tax outgo will reduce. Individuals with earnings above 5 lacs will want the tax rate to be lowered on the taxable income.

Previously, the Income Tax Rate was lowered to 5% (Budget 2017-18) from 10% for the Income Slab between 2.5 lacs- 5 lacs.

Standard Deduction, re-introduced in the last Budget is also expected to continue in the coming Financial Year.

Income Tax Slab for Financial Year 2018-19

Tax Deductions

Revision could also be made to the Tax Deductions available under 80C, 80CCC, and other relevant Sections under Chapter VI-A of the Income Tax Act. Currently, Income Tax Deduction up to 1.5 lacs is available under Section 80C. Deductions is also available on premium paid towards Health Insurance premium (U/S 80D), Contribution in National Pension Scheme (U/S 80CCD (IB), etc.

Revision in Tax Deductions would encourage Individuals to invest in Tax Saving Investment schemes and reduce the Tax Liability.

Tax Deductions Available For Financial Year 2018-19

Medical Benefits

With the introduction of Ayushman Bharat in the last Budget, the medical coverage has been extended to the lower income group. However, Middle Income group would expect higher tax deduction on Health Insurance premium as the cost of Medical expenses is on the rise. Hence, increase in tax deduction (U/S 80D) would enable Individuals to go for higher health insurance cover.

Last Budget, the Tax Deduction for Health Insurance Premium paid for Senior Citizens was raised to Rs 50,000/-.

Tax Benefits on Health Insurance

Retirement Benefits/Senior Citizens

Retirement Benefit Plan such as National Pension Scheme (NPS) could be made more flexible for the investors which would enable more Individuals to enroll for the scheme. The pension benefit under EPS could also be revised to allow increase in the minimum pension amount.

Such a move will benefit the Senior Citizens. Currently, Minimum Pension of Rs 1,000/- provided under EPS is insufficient for elderly to sustain themselves.

NPS: Retirement Benefit Plan