The last budget of current Government before it comes to power again was presented by Finance Minister Mr. Piyush Goyal. It is Interim budget 2019.
In this budget, it was proposed to double the tax exemption limit for salaried class from existing Rs 2.5 lakh to Rs 5 lakh and also increased the standard deduction to Rs 50,000 from current Rs 40,000.
If an individual invests in the specified tax saving schemes of the government, the effective tax-free income limit will be Rs 6.5 lakh a year, while it may go further up with additional avenues like NPS, medical insurance and home loan interest payment.
The gratuity limit has been increased from Rs 10 lakh to Rs 20 lakh from the next fiscal.
For middle class, small depositors and Senior Citizens
TDS threshold on interest from bank, post office deposits will be raised from Rs. 10,000 to Rs 40,000.
The proposal will benefit senior citizens and small depositors who depend upon income from interest on deposits in banks and post offices.
The Budget also proposed to exempt tax on notional rent for unsold housing units for two years. It also proposed that benefit of rollover of capital gains tax will be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains of up to Rs. 2 crore. However, it can be exercised once in a lifetime.
Further, the TDS threshold for deduction of tax on rent is proposed to be increased from Rs. 1,80,000 to Rs. 2,40,000 for providing relief to small taxpayers.
Bonanza for Farmers
Budget announced major sops to provide relief to distressed farm sector. Under the scheme called ‘Pradhan Mantri Kisan Samman Nidhi’, FM announced that farmers holding up to 2 hectares of land will get Rs 6,000 per year cash support. This will cost the exchequer Rs 75,000 crore annually,
The Rs 6,000 will be transferred into bank accounts of each farmer in three equal instalments. It will benefit 12 crore farmers and will be implemented from this fiscal itself.
Rs 20,000 crore have been provided for current fiscal and allocation of Rs 75,000 crore has been announced for the next fiscal.
FM unveiled a mega pension yojna for the unorganised sector workers that will benefit 10 crore people. Workers of the unorganised sector will get assured monthly pension of Rs 3,000 after reaching the age of 60 years under Pradhan Mantri Shram Yogi Mandhan scheme. The scheme will provide assured monthly pension of Rs 3,000, with contribution of 100 rupees per month, for workers in unorganised sector after 60 years of age.
FM Sh. Goyal announced an increase in defence budget to over Rs 3 lakh crore in 2019-20, adding that additional funds will also be provided if necessary. Rs 3,05,296 crore have been provided in the Budget Estimates for 2019-20, compared to Rs 2,82,733 crore provided in 2018-19 Budget Estimates.
Expectations from Next Budget:
We expect the next budget will focus on all areas like infrastructure development, employment generation, start-up businesses, improvement in medical facilities, focus on opening up of educational institutions, increase in Defence expenditures to protect borders and support to farmers in terms of awareness about use of technology to increase agriculture produce. All the upcoming budgets should take India to a higher growth rate in all areas.
We also expect that 30% tax rate should apply only to those earning above Rs. 20 lakhs annually. Currently, the 30% tax rate applies to people earning Rs. 10 lakhs and above.
Campus Director, ICoFP Mumbai