Budget 2019: Key Announcements

• Posted By Amritesh
• On February 1st, 2019
• Comments: 2 responses

Interim Budget 2019 is the last budget presented before the Lok Sabha Election slated to be held later in the year. Incumbent Finance Minister Piyush Goyal presented the budget in Lok Sabha in absence of Arun Jaitley. The Budget has echoed similar sentiments highlighted in my post published yesterday on Budget 2019 Expectations.

In the Interim Budget speech, the Incumbent Finance Minister highlighted the achievements of the Government in last 5 years. The attempt was made to present a budget which would lend balance between populism and economic reforms. Government’s achievement in extending health benefits, controlling inflation, attaining economic growth and good governance formed the core of the budget speech. Incentives announced for Middle Class and Small Farmers is bound to appease majority of the population. Interim Budget clearly reflected the Election sentiments as efforts were made to showcase the economic achievements in last 5 years and also provide Tax relief to the larger section of the society.

Income Tax Calculation for Various Income Slabs

Income Tax Slabs and Rates For Financial Year 2019-20

The announcements would be effective from next Financial Year 2019-20.

Major Announcements: Key Takeaways

#Fiscal Deficit pegged at 3.4% in FY 2018-2019.

#Tax Collection doubled to Rs 12 lacs crore.

#Build next-gen infrastructure ensuring ease of living, India aims to become $ 10 trillion economy in coming 8 years.

#Digital India to reach villages, help in creation of jobs and more startups to come up. Ease of doing business and FDI inflows is helping the economy progress.

#Ayushman Bharat launched last year- Healthcare benefit to cover 50 crore people of the Nation.

#22^nd AIIMS to open in Haryana.

#12 crore farmers with land holdings up to 2 hectares will be provided Rs 6,000 per annum under PM Kisan Scheme. The amount will be paid in 3 installments.

#Farmers affected by natural calamities to receive 2% interest subvention on loans, additional 3% subvention to be extended on timely payment of loans.

#Separate Department for Fisheries to be setup.

#Pradhan Mantri Shram Yogi Mandhan to provide minimum pension of Rs 3,000/- after the age of 60 years to individuals working in unorganized sector. Contribution to be as low as Rs 55/- for 18 year old joining the scheme. Government to make equal contribution under scheme. Individuals earning up to Rs 15,000/- to be covered under the scheme.

#8 Crore LPG Cylinders to be distributed next year under PM Ujwala Yojana.

#Defence Budget crosses Rs 3 lacs core.

#Rural Employment Guarantee Scheme to receive additional Rs 5,000 crore, increasing the scope of employment in the rural areas.

#GST relaxation for Small Businesses.

Personal Finance: Key Takeaways

#Committee has been formed to explore possibilities of reducing the GST tax burden on the new home buyers.

#Income Tax filing and Tax Collection increased due to the initiatives introduced by the Government.

#Tax Scrutiny and Income Tax Assessment (ITA) process to be simplified with the aid of technology.

#ITA to be processed within 24 hours and refunds to be initiated immediately in the future.

#Income Tax exemption under section 87A raised to 5 lacs for Individual Tax Payers. Income Tax benefit will increase from existing Rs 2,500/- to Rs 12,500/-.

#Standard Deduction benefit increased to Rs 50,000/- from existing Rs 40,000/-per annum.

#No Tax Deducted At Source (TDS) on Post Office Savings up to Rs 40,000/- per annum. Limit increased from Rs 10,000/-p.a.

#No Tax Deducted At Source (TDS) on Rental Income up to Rs 2,40,000/- per annum. TDS limit increased from Rs 1,80,000/- p.a.

#Capital Gain benefit available under Section 54 of Income Tax Act on investment in Residential House will be extended to two houses (currently available on only one house), on Capital Gains up to Rs 2 crores.  This is once in a life time benefit available to the Individual.

#Income Tax levied on second self occupied house exempted. Presently, Income Tax is levied on notional rent if an Individual has more than one self occupied house.

Interim Budget 2019: Overall

Interim Budget 2019 is bound to bring cheers to the middle class and small farmers. However, the Income Tax benefit under 87A would have dampened the joy among Individuals with taxable Income above 5 lacs. Senior Citizens also did not have much to cheer about in the budget. But overall it is a Middle Class friendly budget.