The Union Interim Budget 2019 is an attempt to strengthen the impact of the economic measures already taken by the Government as well as laying out a road map to take the country forward on an economic growth path.
The key highlights of the Union Interim Budget 2019 are as below:
DIRECT TAXATION
* Tax rebate raised for income up to Rs 500,000
Though there is no change in the tax slabs for Individual assessees, a tax rebate is given to an Individual assessee having total income upto INR 5,00,000 by way of a proposed amendment to Section 87A of The Income Tax Act, 1961. Such assessee shall be entitled to a deduction of an amount equal to 100% of such income-tax or an amount of INR 12,500/-, whichever is less
* Benefit of rollover of capital tax gains increased from one residential house to two houses
The benefit of rollover of capital gains under Section 54 of The Income Tax Act, 1961 will be increased from investment in one residential house to two residential houses for a tax payer having capital gains up to INR 2 crores. This benefit can be availed once in a life time.
* Exemption of Income Tax on notional income of second self-occupied house
It has also been proposed to exempt levy of income tax on notional rent on a second self-occupied house by way of proposed amendment to Section 23 of The Income Tax Act, 1961. Currently income tax on notional rent is payable if an assessee has more than one self-occupied house.
* Standard Deduction raised to INR 50,000/-
The Standard Deduction under Section 16(ia) of The Income Tax Act, 1961 has been raised from the current INR 40,000/- to INR 50,000/- which will result in a tax benefit of INR 4,700 Crores to more than 3 crores salary earners and pensioners.
* TDS threshold limit proposed to be increased [Section 194A and Section 194I]
The TDS threshold on Interest earned on bank/post office deposits is being raised from INR 10,000/- to INR 40,000/- by way of proposed amendment to Section 194A(3)(i) of The Income Tax Act, 1961. With this proposal there shall be no deduction of TDS with respect to interest on Term Deposit in Banks, post office saving etc. upto the amount of INR 40,000.
The TDS threshold for deduction of tax on rent is also proposed to be increased from INR 1,80,000/- to INR 2,40,000/- by way of proposed amendment to Section 194I of The Income Tax Act, 1961. Both these increased thresholds will provide relief to small taxpayers.
* Income Tax returns to be processed within 24 hours and refunds paid immediately
The Tax Department plans to roll out a mechanism in the next 2 years where all Assessment and verification of the Income Tax returns will be done electronically by an anonymised tax system without any intervention by tax officials bringing transparency to the system, enabling faster refunds and thereby making the Tax administration taxpayer friendly.
* Deemed Let out of property held in stock in trade. [Section 23]
Presently there is a holiday period of one year from the end of the year in which the completion certificate of the property (held as stock) is obtained. The developer had to pay tax on the notional rent of such property after the completion of one year.
It has been proposed to extend the holiday period from one year to two years. This shall benefit the developers to hold their inventory for one more year without paying tax on notional rent of such stock in trade, thereby giving them more time to sell their apartments.
* Deduction in respect of profits and gains from housing projects. [Section 80IBA]
The benefit of deduction of an amount equal to hundred per cent of the profits and gains derived from the business of developing and building housing projects under Section 80-IBA of The Income Tax Act, 1961 is being extended for one more year i.e. to the housing projects approved by the competent authority till 31st March, 2020.
INDIRECT TAXATION
* Exemption in GST
AGRICULTURE
* Minimum support price of 22 crops
With the aim to double the income of farmers, Government has fixed the Minimum Support Price of all 22 crops at minimum of 50% more than the cost.
* Rs 6,000 per year assured income for small and marginal farmers
The Government announced the Pradhan Mantri Kisan Samman Nidhi (PMKISAN) scheme, which will provide a guaranteed income of INR 6,000 per year to small and marginal farmers. This will involve an annual outlay of INR 75,000 crore, which is around 0.36% of the GDP (2019-20 Budget estimate).
* Two percent interest subvention for farmer
Interest subvention of 2% was announced for farmers affected by natural calamities. An additional 3% relaxation will be given for timely repayment of loans.
This scheme has also been extended to farmers engaged in animal husbandry and fishery-related activities, and availing loans through Kisan Credit Cards.
RURAL SECTOR
* Pradhan Mantri Gram Sadak Yojana
The budgetary allocation of Rs 19,000 crore for construction of rural roads has been made under Pradhan Mantri Gram Sadak Yojana. This will triple the magnitude of rural road construction in the country.
* Government to allocate Rs 60,000 crore for MNREGA scheme
Mahatma Gandhi National Rural Employment Guarantee program’s allocation increased by Rs 5,000 crore to Rs 60,000 crore for FY20
EMPLOYMENT
* New social security coverage scheme for unorganised sector workers
The Pradhan Mantri Shram-Yogi Maandhan Yojana has been announced for workers in the unorganised sector with a monthly income upto INR 15,000. The scheme will provide them with an assured monthly pension of INR 3,000. The scheme is contributory and the government will make a matching contribution.
Scheme to benefit 10 crore workers in the unorganized sector, which may become the world's biggest pension scheme for unorganized sector in five years
* Employees State Insurance Eligibility
Employees' State Insurance eligibility cover limit is being raised to Rs 21,000 per month from Rs 15,000 per month
* Gratuity
Gratuity limit increased from Rs 10,00,000 to Rs 30,00,000
RAILWAYS
* Operating ratio, Capex and provision
DEFENCE
* OROP and Budget provision
OTHER
* Medical expenditure - AIIMS
22nd AIIMS is to be set up in Haryana.
* A single window clearance for filmmakers
The Single window clearance for ease of shooting films will be available not only to foreigners but also to Indian filmmakers to promote entertainment industry
* Education
Rs. 38,572 crore allocated for the National Education Mission
* National Program on Artificial Intelligence
In order to take the benefits of artificial intelligence and related technologies to the people, a national program on ‘Artificial Intelligence’ has been envisaged, a national AI portal to be developed soon
* Economy and Fiscal Health