Highlights of Union Budget 2019-20

Finance Minister Nirmala Sitharaman presented Budget 2019-20 on 05.07.2019

Finance Minister Nirmala Sitharaman became second women in the history of Independence India to present the Union Budget. She presented the maiden budget of Narendra Modi 2.0 government in the Lok Sabha.

KEY TAKEAWAYS FROM THE BUDGET

10-POINT VISION FOR THE DECADE

• Building Team India with Jan Bhagidari: Minimum Government Maximum Governance
• Achieving green Mother Earth and Blue skies through a pollution-free India
• Making Digital India reach every sector of the economy
• Launching Gaganyan, Chandrayan, other Space and Satellite programmes
• Building physical and social infrastructure
• Water, water management, clean rivers
• Blue Economy
• Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables
• Achieving a healthy society via Ayushman Bharat, well-nourished women & children, safety of citizens
• Emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices under Make in India

DIRECT TAXES

• Tax rate reduced to 25% for companies with annual turnover up to Rs. 400 crore
• Surcharge increased on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and Rs. 5 crore and above
• Interchangeability of PAN and Aadhaar
  • Those who don‟t have PAN can file tax returns using Aadhaar
  • Aadhaar can be used wherever PAN is required
• Pre-filling of Income-tax Returns for faster, more accurate tax returns

Tax proposals Individual tax payers with taxable income of up to Rs 5 lakh will get full tax rebate from now on. Those earning Rs 6.5 lakh will not have to pay tax, if they invested in specified savings such as PF, PPF, etc. However, the tax slabs will remain unchanged. This move will benefit around 3 crore middle class tax payers. For salaried persons, Standard Deduction is being raised from the current Rs 40,000 to Rs 50,000. The Tax Deducted at Source (TDS) on fixed deposits and postal deposits will be exempted for interest earned up to Rs 40,000 from Rs 10,000 currently. The rent up to Rs 2.4 lakh will be exempted from TDS. The benefit of capital gains of up to Rs 2 crore will be increased to investment on two residential houses. This benefit can be availed only once in a lifetime. The benefit of the section 80IBA of Income Tax Act will be extended for one more year for availing of the affordable housing. Section 80IBA of Income Tax Act, 1961: Section 80IBA deals with 100 percent deductions for the builders promoting affordable housing schemes subject to fulfilment of a few conditions.

Affordable Housing

• Additional deduction up to Rs. 1.5 lakhs for interests paid on loans borrowed up to 31^st March, 2020 for purchase of house upto Rs. 45 lakhs
  • Overall benefit of around Rs. 7 lakh over loan period of 15 years

Boost to Electric Vehicles

• Additional income tax deduction of Rs. 1.5 lakh on interest paid on electric vehicle loans
• Custom duty exempted on certain parts of electric vehicles

Relief for Start-ups

• 'Angel tax' issue resolved - start-ups and investors filing requisite declarations and providing information in their returns not to be subjected to any kind of scrutiny in respect of valuation of share premiums
• Funds raised by start-ups to not require scrutiny from Income Tax Department
• Special administrative arrangements for pending assessments and grievance redressal

INDIRECT TAXES

• Exemptions from Custom Duty on items now manufactured in India is withdrawn
• Defence equipment not manufactured in India exempted from basic customs duty
• Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol and diesel
• Custom duty on gold and other precious metals increased

NEW INITIATIVES

India's water security

• New Jal Shakti Mantralaya to look at the management of our water resources and water supply in an integrated and holistic manner
• Jal Jeevan Mission to achieve Har Ghar Jal (piped water supply) to all rural households by 2024
• To focus on integrated demand and supply side management of water at the local level
• Convergence with other Central and State Government Schemes to achieve its objectives

Youth

• New National Education Policy to be brought which proposes
  • Major changes in both school and higher education
  • Better Governance systems
  • Greater focus on research and innovation
• National Research Foundation (NRF) proposed
  • To fund, coordinate and promote research in the country
  • To assimilate independent research grants given by various Ministries
  • To strengthen overall research eco-system in the country
  • this would be adequately supplemented with additional funds
• 'Study in India proposed to bring students to study in Indian higher educational institutions
• Khelo India Scheme to be expanded with all necessary financial support

MSME Sector

• A scheme of sanctioning loans upto 'Rs 1 crore in 59 minutes' has been launched. GST-registered MSME units will get 2 percent interest rebate on incremental loan of Rs 1 Crore
• MSMEs can now sell their products on the Government eMarketplace (GeM), a one-stop-shop to facilitate online procurement of common use goods

Other announcements

• A Welfare Development Board will be created for nomadic and semi-nomadic community. A Committee under NITI Aayog will be formed to identify these committees
• National artificial intelligence portal will be developed soon