UNION BUDGET 2019 HIGHLIGHTS

The New Finance Minister, Mrs. Nirmala Sitharaman presented her and the Government’s first Union Budget.

General Comments and Proposals:

  1. Stringent Commitment to Fiscal Discipline
  2. Number of patents has tripled in last 5 years
  3. Economy reached $2.7 trillion in last 5 years
  4. India now the 6th largest economy in the world; 3rd best economy in terms of purchasing power
  5. $5 Trillion mark well within our reach
  6. Target to achieve $3 Trillion mark in 2019 itself
  7. Emphasis of MSMEs, Star-ups, Defence
  8. Need to invest heavily in Infrastructure
  9. Major reforms planned to serve the Aam Aadmi
  10. India’s private sector industry aided growth
  11. Gone are the days of policy paralysis
  12. Connectivity is the life grid of economy; dedicated freight corridors in pipeline
  13. Udaan scheme to provide air connectivity; Sagarmala for road, rail, port connectivity
  14. India must enter aircraft financing
  15. Hope to become self-sufficient in aviation
  16. Big metro line push for new India
  17. Push for National Common Mobility Card; multiple transport charges with one inter-operable transport Rupay card
  18. Upfront incentive for producing and purchasing electronic vehicles; providing infrastructure for charging e-vehicles
  19. Need to develop inland waterways; Jal Marg for inland cargo movement
  20. Jal marg terminal in Varanasi operational; jal marg via Ganga to increase 6 fold
  21. 50 lakh crores needed for Jal Marg scheme
  22. One Nation – One grid scheme; will make power sharing more efficient
  23. UDAI scheme for DISCOMs to be improved
  24. Easy, hassle free loan schemes for MSMEs; loans upto 1 crore in 59 minutes
  25. 2% interest subvention for all GST registered MSMEs
  26. Pension for 3 crore retail traders to be extended to ensure social security
  27. Rental laws to be reformed
  28. Proposal to reform KYC for FPIs
  29. Social Stock Exchange under SEBI proposed
  30. Electronic Fund raising platform in process
  31. FDI inflows have remained robust; 54.3 billion USD in last year, 6% increase over last year.
  32. 100% direct FDI will be permitted to insurance intermediaries
  33. Examining scope of opening FDI in aviation and media
  34. Boost to single band retail FDI
  35. Plan to host annual Global Investors’ Meet
  36. India world’s top remittance recipient
  37. Focus on Gaon, Grameen, Kisaan
  38. Ujjwala scheme has been a game changer with unprecedented expansion
  39. Power and LPG to all rural households by 2022 other than those who are unwilling to take
  40. 95 Crore houses to be provided under Awaas Yojana – Grameen
  41. Fishing industry crucial to economy; focus on infrastructure modernisation with robust fisheries schemes proposed
  42. Gram Sadak Yojana Phase-3 to be launched; major boost to all weather connectivity
  43. 125000 kms to be constructed by next 5 years
  44. Cluster based development for productivity; big thrust to traditional industries
  45. Big announcement for farmers; hope to make 10000 farmer groups
  46. Skill 75000 rural entrepreneurs
  47. Ease of business and living must apply to farmers
  48. Back to basics – zero budget farming to return; steps to double farmer’s income
  49. Adequate and clean potable drinking water for all rural households under Har Ghar Jal scheme by 2024
  50. Sustainable water supply management
  51. 60 crore toilets have been constructed since October 2016 under Swacch Bharat Scheme
  52. Over 5 lakh villages have been made open defecation free
  53. Sustainable solid waste management in every village to be included under Swacch Bharat Scheme
  54. 2 crore rural Indians have been made digitally literate
  55. 81 lakh houses with investment of over INR 4.83 lakhs sanctioned under the Awaas Yojana – Urban; over 26 lakh houses already constructed
  56. 95% of all cities have been declared open defecation free (ODF); 100% ODF by 2nd October, 2019
  57. New National Research Foundation to be launched for youth; focus on youth and employment
  58. Major changes for school and higher education envisaged
  59. 3 Indian colleges in world’s top 200
  60. Bid to invite foreign students to India; “Study in India” scheme to be launched
  61. Focus on sports development; launch of “Khelo India” scheme
  62. Industry relevant skill training for youth; over INR 10 million allocated for the scheme
  63. 35 crore LED bulbs distributed
  64. Proposal to streamline multiple labour laws; only 4 basic labour codes to standardise laws proposed
  65. TV channel with program exclusively for start-ups; under the DD bouquet
  66. 3000 crore pension for unorganised labour
  67. Focus on ease of living for residents of new India; focus on clean environment
  68. Big push for women empowerment; gender analysis of budget in place
  69. Aadhaar Card for NRIs on return under 180 days on arrival
  70. Efforts to link artisans to world market
  71. 18 new diplomatic missions in Africa
  72. Digital move to preserve tribal heritage
  73. 17 iconic sites identified to promote tourism
  74. NPAs of banks have reduced by INR 1 lakh crores
  75. Record recovery of INR 4 lakh crores made in last year under insolvency code
  76. Public sector banks to be provided INR 70000 crores recapitalisation to boost capital to improve credit
  77. One time credit guarantee for NBFCs
  78. 100 lakh crore for housing infrastructure
  79. RBI to regulate housing loan finance sector
  80. Will reinitiate disinvestment in select NBFCs
  81. Government resolved to reinitiate disinvestment of Air India
  82. India’s sovereign external debt to GDP lowest among the world at less than 5%
  83. New series of coins of INR 1, 2 5, 10 and 20 easily identifiable to the visually impaired launched in March 2019 to be made available to public use shortly.
  84. 105000 crore disinvestment target for the Government

Direct Tax proposals:

  1. Direct tax revenue has increased by over 78% from INR 6.38 lakh crores in FY 2013-14 to INR 11.37 lakh crores in FY 2018-19
  2. Growing at double digit rates every year
  3. Lower corporate tax rate of 25% extended to companies having annual turnover upto INR 400 crores
  4. The lower corporate tax rate will cover 99.30% of all companies registered in India
  5. Additional deduction of INR 1.50 lakh for interest paid on purchase of electric vehicles; this is apart from the proposal under indirect tax to reduce GST rate on electric vehicles from 12% to 5%
  6. Valuation of Funds raised by start-ups will not require any scrutiny by the Income Tax department
  7. Period of exemption on capital gains for investment in start-ups extended upto end of March, 2021
  8. Additional housing loan deduction of INR 1.50 lakhs over the existing INR 2.00 lakhs for interest paid on purchase of affordable house upto INR 45 lakhs purchased till end of March, 2020
  9. Inter-changeability of PAN and Aadhaar by allowing assessees to file Income Tax returns by just quoting Aadhaar number instead of PAN for those who do not have PAN
  10. Faceless e-assessment involving no human interface to be launched from this year in a phased manner
  11. Central Cell will issue notices electronically without disclosing the details of the assessing officer and this central cell will only be the contact point between the assessee and the assessing officer
  12. TDS @ 2% applicable for cash withdrawals over INR 1 Crore in a year from any bank account
  13. Business establishments with annual turnover over INR 50 crores to provide digital payment options to customers with no charges for customers or the merchants. RBI and the banks to absorb these costs
  14. Surcharge on Individuals having annual income over INR 2 crores and over INR 5 crores of 3% and 7% respectively

Indirect Tax proposals:

  1. Taxpayers having annual turnover of upto 5 crores will be required to file only quarterly returns
  2. Proposal to have only one single monthly or quarterly return
  3. Electronic invoicing system to be rolled out by Jan 2020; will eliminate the requirement for e-way bills

 

  1. Sanjay Thampy

FCA, Grad. CWA, CS, DBM

sthampyca@gmail.com

 

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Interim Finance Minister, Mr. Piyush Goyal presented the sixth and the last Union Budget of the present Government, in the absence of the Finance Minister, Mr. Arun Jaitley.

This is just an interim budget before the presentation of the full budget for the year which will be presented by the new Government post the elections.

Ahead of Budget: The Government has notified its increase in contribution to Central Government employees NPS fund from 10% earlier to 14%.

 

General Comments and Proposals:

  1. Inflation in Dec 2018 was 2.19%
  2. Average inflation brought down to 4.6%
  3. Fiscal deficit cut from 6% to 3.46%
  4. Current account deficit down to 2.5% of GDP
  5. INR 2.34 billion received as FDI during the last year.
  6. Highest liberalisation in automatic FDI
  7. 98% rural sanitation achieved by Swachh Bharat Abhiyaan
  8. 4 lakh villages have been declared open defecation free
  9. INR 19000 Crores allocated to Pradhan Mantri Sadak Yojana in 2018-19
  10. INR 27505 crores allocated to Pradhan mantra Awaa Yojana in 2018-19
  11. INR 30634 crores allocated to National Health Mission in 2018-19
  12. Ayushman Bharat provided medical treatment to 50 Crore people.
  13. 100% electrification for all households to be achieved by Mar 2019.
  14. Minimum Support Scheme of INR 6000 py to all small farmers holding land below 2 hectares called PM Kisan.
  15. This scheme to be applicable from Dec 2018 and will be distributed in 3 instalments of INR 2000 each to be directly credited to their Bank accounts.
  16. INR 75000 Crores allocated for this scheme. 12 Crore farmers to benefit from this scheme.
  17. Allocation for MNREGA increased to INR 60000 Crores.
  18. Increase in contribution to Central Government employees NPS fund from 10% earlier to 14%
  19. 2% interest subvention for farmers extended to animal husbandry and fisheries.
  20. Additional 3% benefit for timely repayment of farm loans.
  21. Farmers severely affected by natural calamities will get 2% interest subvention
  22. Gratuity limit increased from 10 lakhs to 30 lakhs
  23. ESI eligibility increased from INR 15000 to INR 21000 pm
  24. Anganwadi workers to get 50% income increase
  25. Mega pension scheme for the unorganised sector. Pradhan Mantri Shram Yogi Mandhan launched to provide assured monthly pension of 3000 rupees per month, with contribution of 100 rupees per month, for workers in unorganized sector after 60 years of age.
  26. 10 crore workers to be covered under PM Pension Yojana
  27. Welfare Development Board to be set up for nomadic communities.
  28. 8 crore free LPG connections under PM Ujjwala Yojana
  29. 70% beneficiaries of the PM Mudra Yojana are women
  30. PM Kaushal Vikas Yojana training 1 crore youth.
  31. 3% tax benefit for women owned MSMEs
  32. INR 3 lakh Crores allocated for defence sector.
  33. 27 kms of Highways being built every day, with Indian becoming the world’s fastest highway developer.
  34. IMR 64587 crores allocated to Railways for FY 20.
  35. Aim to achieve 1 lakh digital villages in next 5 years.
  36. 34 lakh Jan Dhan bank accounts to be opened.
  37. Allocation to North Eastern States at INR 58116 crores, up by 21%.
  38. 80% growth in tax base
  39. 54% of the total returns filed for AY 2018-19 have been accepted without any scrutiny.
  40. Only 0.46% of all Income Tax returns were taken up for scrutiny last year.
  41. All returns to be scrutinised and assessed and refund issued within 24 hours from next assessment year.
  42. Income Tax assessment will be completely online by anonymous tax officials with the tax payer and the assessment officer not knowing the identity of each other from next assessment year.
  43. Quarterly GST returns to be soon introduced for businesses having turnover up to INR 5 cores.
  44. GST burden on housing to be reduced soon.
  45. India will become $ 10 trillion economy by next 8 years.
  46. Indian astronaut to be put in space by 2022.
  47. Comprehensive Healthcare system for all citizens by 2030.
  48. Fiscal deficit for 2019-20 estimated at 3.4% of GDP
  49. Total expenditure up from INR 24 lakh cores to INR 27 lakh crores.
  50. INR 38572 crores allocation for National Education Mission
  51. Budget allocation for SC/STs increased to INR 76800 Crores

Direct Tax proposals:

  1. No specific change in personal income tax slabs
  2. Individual tax payers having annual taxable income up to INR 5 lakhs will get full tax rebate
  3. Hence including the Chapter VIA deductions, hence individuals having income up to INR 6.50 lakhs will be fully exempt from tax.
  4. Interest on Home Loans, NPS, and Medical Insurance deductions will ensure people even having higher income will not have to pay any tax.
  5. Standard deduction for salaried employees raised from INR 40000 to INR 50000
  6. Income Tax on notional rent in owning more than one house exempted on second self-occupied property.
  7. TDS threshold on interest on Bank deposits and Post Office deposits increased from INR 10000 to INR 40000
  8. TDS threshold of TDS on rent increased from INR 1.80 lakhs to INR 2.40 lakhs per annum.
  9. The benefit of roll-over of capital gains exemption u/s 54 will be increased from investment in one residential house to two residential houses for capital gains up to INR 2 Crores. This benefit can be availed once in a lifetime by an individual.
  10. The benefits u/s 81IBA of affordable housing scheme has been extended for one more year for housing projects approved up to 31st March 2020.
  11. The period of levy of TDS on notional rent on unsold inventory by builders extended from one year to two years.

Sanjay Thampy

FCA, Grad. CWA, CS, DBM

sthampyca@gmail.com

 

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