What is Budget?

A budget is a financial plan for the specified period. The Government of India i.e., Ministry of Finance after consultation with all the other ministries prepares the budget. The budget will be generally presented by the Finance Minister on the first day of February in Parliament. The proposed budget will come into effect from April 1st of the respective year.

Highlights

A relief mainly to middle class, and the farmers. Given the priority to taxation reforms, women empowerment, workers in unorganized sector and agriculture.

There is no change in tax slabs, hike in limits of 80C and interest on home loan in contrast to the expectation. But the Income Tax has provided the complete tax rebate upto income of Rs 5 Lakhs. In other words, the tax payer with gross income of Rs 6.5 lakh need not pay any tax if he has 80C deductions

Below are the compiled sector/category wise highlights of the interim budget of FY 2019-20

Direct Taxation (Income Tax + )

• All Income Tax returns to be processed in 24 hours and returns issued simultaneously.
• Individual Tax payers with annual taxable income of Rs 5 lakhs will get full tax rebate. Individuals with Rs 6.5 lakh as gross income is not required to pay any tax if they have investments.
• Standard tax deduction for salaried employees increased to Rs 50,000 from 40,000.
• No income tax on notional rent on 2nd house property.
• TDS threshold on rental income per annum has increased from Rs 1.8 lakh to Rs 2.4 lakh.
• TDS threshold on interest on bank and post office deposits raised from 10,000 to Rs. 40,000.
• Electronic verification and assessment of returns selected for scrutiny will be done in 2 years.
• There is increase in number of returns filed from 3.79 crore to 6.85 crore and increase in tax collections from 6.38 lakh crore to 12 lakh crore this year.
• 99.54% of all IT returns were accepted immediately without scrutiny.
• Benefits u/s 80(i)BA has be extended for 1 more year for the housing projects approved till the end of 2019-20.
• For Real Estate, Income Tax relief on Notional rent from unsold houses extended to 2 years.

Indirect Taxation (GST + )

• The tax payers with the annual turnover upto Rs 5 crores can file quarterly returns under GST
• GST Council will take steps to reduce tax burden on home buyers
• Most daily use items now under 0-5% tax slab under GST
• Customs duty has been abolished on 36 capital goods
• Indian Customs is going to implement full digitization of Exim transactions and leveraging RFID for logistics

Agriculture

• Direct Income Support of Rs 6000 per annum for farmers holding unto 5 acres. It will be credited to the farmer’s bank account in 3 instalments.
• MSP will be increased to 1.5 times of cost of production for 22 crops
• Allocation of funds has been increased to Rs. 750 crores for Rashtriya Gokul Mission (Fisheries & Animal husbandry).
• All farmers severely affected by natural calamities will get 2% interest subvention and 3% interest subvention on timely repayment of crop loans
• All farmers pursuing animal husbandry and fisheries will get 2% interest subvention

Salaries, Wages & Pension

• Workers in unorganized sector will get assured pension of Rs 3000 per month after retirement with monthly contribution of Rs 100.
• Tax free Gratuity limit increased from 10 lakhs to 30 lakhs
• The government proposes to launch a mega pension yojana

Defence

• Budget aims to strengthen the defence and national security
• Beyond 3 lakh crores is allocated to Defence
• Already Disbursed 35000 crores for the soldiers under OROP and there will be substantial hike in military service pay

Health Care

• Medicines at affordable prices made available through Pradhan Mantri Jan Aushadi Kendra’s
• Prices of essential medicines, cardiac stents and knee implants reduced
• 22nd AIIMS to be setup in Haryana. Already 21 AIIMS established.

Next Generation Infrastructure

Identified as Priority Sectors to leapfrog India

1. Digital India Services for every Citizen
2. Clean & Green India
3. Rural industrialization using modern technologies
4. Clean Rivers - with safe drinking water to all Indians
5. Oceans and coastlines
6. India becoming launchpad of the world
7. Self-sufficiency in food and improving agricultural productivity with emphasis on organic food
8. Healthy India
9. Minimum Government Maximum Governance

Other Sectors

• 10% reservation for economically backward classes (EBC) in addition to existing other reservations.
• 2 crore free LPG Connections under Ujjwala scheme is to be given. Already 6 crore LPG connections were given
• India has become the largest hub of Startups as the Indian youth has turned from job seekers to job creators.
• Benefits of 26 weeks maternity leave and Pradhan Mantri Vandana Yojana for pregnant women for financial empowerments of women
• Committee under NITI Aayog will be set up to complete the task of identifying De-Notified, Nomadic and Semi-Nomadic communities not yet formerly classifieds