Highlights Of Current Year

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Highlights of current year’s union budget and its analysis

Highlights of the budget,2019

  • Income up to Rs 5 lakh exempted from income tax
  • Standard deduction raised to Rs 50,000 from Rs 40,000
  • Direct tax proposals to provide Rs 23,000 cr relief to 3 crore taxpayers
  • Persons with gross income up to Rs 6.50 lakh not required to pay any income tax if they make investments in provident funds, specified savings and insurance.
  • 12 crore small, marginal farmers to be provided assured yearly income of Rs 6,000 under PM-KISAN scheme
  • TDS threshold raised to Rs 40,000 from Rs 10,000 on interest earned on bank/post office deposits
  • Tax exempted on notional rent on a second self-occupied house
  • TDS threshold for deduction of tax on rent to be increased to Rs 2.40 lakh from Rs 1.80 lakh
  • Tax benefits for affordable housing extended till March 31, 2020
  • Tax exemption period on notional rent on unsold inventories extended to two years from one year
  • Allocated Rs 20,000 crore in 2018-19, Rs 75,000 crore for FY2019-20 for PM-KISAN scheme
  • Interest subvention of 2% during disaster to be provided to farmers for the entire period of reschedulement of loan
  • 2% interest subvention to farmers for animal husbandry and fisheries activities; additional 3% in case of timely repayment
  • Rs 3,000/month pension for 10 cr unorganised sector workers with contribution of Rs 100/55 per month under PM Shram Yogi Maandhan scheme
  • Fiscal deficit pegged at 3.4% of GDP for 2019-20; target of 3% of fiscal deficit to be achieved by 2020-21
  • Current Account Deficit pegged at 2.5% of GDP for FY20
  • Total expenditure to rise by 13 pc to Rs 27.84 lakh cr in FY20
  • National Education Mission allocation increased by about 20% to Rs 38,572 cr
  • Allocation for Integrated Child Development Scheme increased by over 18% to Rs 27,584 cr
  • Disinvestment target of Rs 80,000 cr in 2018-19 likely to be met; Target for FY20 set at Rs 90,000 cr
  • 25% additional seats in educational institutions to meet the 10% reservation for the poor
  • Defence budget to cross Rs 3,00,000 cr for the first time
  • Allocation for North East increased by 21% to Rs 58,166 cr in FY20
  • Railways to get capital support of Rs 64,587 cr in FY20
  • Indian filmmakers to get access to single window clearance for ease of shooting films; regulatory norms to rely more on self-declaration
  • 2% interest subsidy for MSMEs on an incremental loan of Rs 1 crore for GST-registered entities
  • At least 3% of the 25% sourcing for the government undertakings to be from women-owned SMEs
  • One lakh villages to be transformed into digital ones in 5 years
  • New portal to support national programme on Artificial Intelligence
  • Reforms in stamp duty; amendments to ensure streamlined system for levy of stamp duties to be imposed and collected at one place
  • A separate Department of Fisheries to be created for welfare of 1.5 crore fisherman
  • 22nd AIIMS to be setup in Haryana
  • Rs 60,000 crore allocation for MGNREGA in 2019-20
  • India poised to become USD 5 trillion economy in next 5 years; aspires to become USD 10 trillion in the subsequent 8 years.

The Interim Budget 2019 furthers the agenda of the Modi Government for the all-inclusive growth of the nation. Though it announces the launch of a few schemes such as Pradhan Mantri Shram-Yogi Maandhan and Pradhan Mantri Kisan Samman Nidhi, it also takes us through the various schemes already introduced by the Narendra Modi-led government in the past years.

With a keen eye on the coming general election, 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 the first, an insurance scheme for the second, and tax exemptions for the third.

One of the fundamental purposes of this budget is to set up Fisheries & Aqua Culture Infrastructure Development Fund & Animal Husbandry Infrastructure Development Fund for the purpose of financing the sectors. The Centre will co-ordinate with the State Governments to facilitate farmers for installing solar water pumps to irrigate their fields. He also proposed to extend the facility of Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their working capital requirements.

A pension scheme for the unorganised sector has been announced for workers with monthly income up to INR 15,000. The government has also extended tax benefit for lower income groups in the form of tax rebate and other tax relief.

The government has laid down a strategic vision for the country focusing on 10 key themes comprehensively covering all aspects of the economy to take India to the next level of development with social equity.

The Union Budget 2019 sets a positive tone for economic development. The Budget is an attempt to provide a fine balance between larger socio-economic requirements and fiscal prudence.

The Government, has indeed, handed over a "goodies bag" to the individual taxpayers in the form of beneficial announcements. As per the Budget announcement, individuals with income up to INR 5 lakhs will not have to pay any income tax.

Finance minister mentioned that individuals with gross income up to INR 6.5 lakh will not need to pay any tax if they make investments in provident funds and prescribed equities. Though a meagre increase, the standard deduction has been pegged up from existing INR 40,000 to INR 50,000. Budget 2018 had introduced a standard deduction of INR 40,000 for the salaried class, in lieu of deductions of INR 15,000 for medical reimbursement and INR 19,200 for transport allowance. TDS thresholds for interests on post office and bank deposits have been raised from Rs 10,000 to Rs 40,000. This would result in higher interest credits, a part of which was getting locked on account of TDS, to be subsequently claimed as refunds by the taxpayers falling under the exemption thresholds.

 


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