Mr. Piyush Goyal, the Finance Minister has presented the Union Budget of 2019-2020. Though this is interim budget before elections, it has come with benefits to employees, farmers and middle class people.What are the key budget highlights of 2019-2020? What are the budget highlights which would have impact on personal finance?Which are the budget changes which would impact employees? What are the key measures Govt. Of India proposed in this budget, which would benefit the common man in 2019? Does an investor get benefited out of this Budget of 2019-2020?
Union Budget Highlights 2019-2020 in Simple Terms
Finance Minister Mr.Piyush Goyal (caretaker finance minister) presented the Union Budget for 2019-20 indicating that Indian economy is on track. Here are the key highlights.
Budget highlights 2019 which affect in Personal Finance
1) No income tax if your taxable income is Rs 5 Lakhs. If you are able to invest Rs 1.5 Lakhs in Provident fund and necessary equities, even if you have Rs 6.5 Lakhs gross taxable income, you may pay zero income tax for FY2019-2020. One should note that if your income crosses Rs 6.5 Lakhs or you are not investing in provident fund and necessary equities (clarity need to emerge about equities), then you would lose the tax rebate specified here.
2) Standard deduction increased from Rs 40,000 to Rs 50,000 for salaried class employees.
3) TDS threshold for home rent increased from Rs 1.8 lakhs to 2.4 lakhs.
4) No tax on Interest income from fixed deposits from banks and post offices up to Rs 40,000.
5) Capital gains tax exemptions under Section 54 to be available up to Rs 2 crore. Capital gains exemption to be available on 2 house properties
6) Income Tax returns (ITR) to be processed within 24 hours and refunds will be paid immediately. This is really good news as ITR Processing was taking longer time and income tax refunds used to take 3 months to 6 months time frame earlier.
7) In next two years, almost all assessment and verification of IT returns (ITR) will be done electronically by a new tax system without any intervention by officials.
8) Unorganised sector workers would get Rs 3,000 per year pension. For them a new pension scheme “New Pradhan Mantri Shram Yogi Maandhan Yojana” is being introduced. This applies for every worker who has income up to Rs 15,000 per month. If they can contribute Rs 100 per month now, they would get Rs 3,000 per month pension after retirement. Govt allocates Rs 500 crore for the scheme.
9) Gratuity limit increased for workers from Rs 10 Lakhs to Rs 30 lakhs.
10) Exemption of tax on second self-occupied house is likely to give further boost to the housing sector.
11) The capital gains exemption under Section 54 is made available on two house properties.
Budget highlights 2019 which would benefit Farmers
1) Small and Marginal Farmers would get Rs 6,000 per annum assured income support. Farmers having up to 2 hectare of lands will get Rs 6,000 per year in three equal installment. The scheme will be effective from December 1, 2018.
2) Introducing Interest subvention for farm loan takers. Farmers affected by natural calamities to get 2% interest subvention and additional 3% interest subvention upon timely repayment
3) There would be 2% interest subvention to farmers who pursue animal husbandry, fisheries through kisaan credit cards.
4) Introducing Kamadhenu Scheme for Animal Industry.
Budget highlights 2019 that affect GST in India
1) Group of Ministers suggested several ways to reduce GST for house buyers.
2) Direct tax collections increased from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore in FY2018-19.
3) Regarding Businesses with Rs 5 crore annual turnover or lower, has 90% of GST payers and they will be allowed to file quarterly returns.
4) Govt abolishes duties on 36 capital goods.
Other key budget highlights of 2019 in detail
1) Government allocates Rs 60,000 Crores for MNREGA
2) They have allocated Rs 19,000 Crores for construction of roads in rural areas under gram sadak yojana scheme.
3) This time Govt of India has increased the defense budget to Rs 3 Lakh Crores.
4) Railways Capex allocated is Rs 1.6 Lakh Crores
5) Single window clearance will be made available for film makers and anti-cam recording provision would be introduced to fight piracy.
6) Govt aims to 9 priority sectors which includes, Build Digital India, Clean and green India, Expanding rural industrialization, Clean Rivers with safe drinking water in India, Oceans and Coastlines, India becoming launch pad of the world, Improving agricultural productivity, Healthy India and Min Govt and max governance.
Which Stocks would benefit from Budget 2019?
1) Since there are announcements made for Farmers in Budget 2019, agriculture and auto sector would boost. Investors can look at investing in Bajaj Auto and Maruti which might get benefitted. One can look at some of the Rural Mutual fund schemes too.
2) Defence sector is another sector which would get boosted as the defence budget is increased to Rs 3 Lakhs Crores.
3) What could uplift the demand sentiments in 2 wheeler segment is the announcement to provide relief to individual taxpayers by increasing the maximum amount of tax rebate to Rs 12,500 from the existing Rs 2,500. The tax rebate should now be admissible to taxpayers having total income up to Rs 5 Lakh, instead of the existing Rs 3.5 lakh. The standard deduction limit has been increased to Rs 50,000 from Rs 40,000 earlier to bring in some savings to tax payers. These announcements are expected to increase the disposable income of individuals and thereby increase discretionary expenses such as buying a motorcycle or a scooter. Hero MotoCorp, Bajaj Auto and TVS Motor are expected to be the beneficiaries of these announcements.
What does Mr.Narendra Modi say about Interim Budget 2019-2020?
Mr.Modi says this budget as an important step that strengthen the nation. He believes that in a way, PM Kisan Yojana is the biggest scheme for farmers since Independence. For years, there has been a demand to exempt Rs. 5 lakhs annual income from tax and they have done it.
Union Finance Minister Piyush Goyal on Friday announced Rs. 61,398 crore budgetary allocation for the health sector for the 2019-2020 fiscal, with Rs. 6,400 crore earmarked for the centre’s ambitious “Ayushman Bharat” scheme.
The health outlay for the upcoming financial year is the highest in the last two financial years and a 16 per cent increase over the 2018-2019 allocation which was Rs. 54,302.50 crore.
Over Rs. 250 crore has been allocated for setting up Ayushman Bharat Health and Wellness Centres under the National Urban Health Mission to provide comprehensive and quality primary care close to the community. Rs. 1350 crore has been set aside for the Health and Wellness Centres under the National Rural Health Mission.
Under the programme, nearly 1.5 lakh sub-centres and primary health centres will be transformed as health and wellness centres by 2022. These centres will be equipped to provide treatment for diabetes, cancer and other illnesses.
The allocation for the National Health Mission (NHM) for 2019-20 was raised to Rs. 31,745 crore from the last budget”s allocation of Rs. 30,683.05 crore. The Rashtriya Swasthya Bima Yojna (RSBY) which features under the NHM saw an allocation of Rs. 156 crore, a decline of Rs.144 crore.
The government allocated Rs. 2,500 crore to its National AIDS and STD Control Programme an increase of Rs. 575 crore from last budget’s allocation of Rs. 1,925 crore.
The budgetary allocation for the AIIMS has been increased to Rs. 3599 crore from Rs. 3,298 crore in the 2018-2019 fiscal.
The National Programme for Health Care for the Elderly saw an increase in allocation from Rs. 80 crore to Rs. 105 crore while the National Mental Health Programme saw an hike from Rs.5.50 crore to Rs. 40 crore.
The budgetary allocation for the National Programme for prevention and control of Cancer, Diabetes, Cardio-vascular Disease and Stroke was increased to Rs. 175 crore from Rs. 100.50 crore. Allocation to the Tobacco Control Programme and Drug Deaddiction Programme was Rs. 65 crores, a decline by Rs. 2 crore.
- Income tax relief for individual taxpayers: Full tax rebate of Rs12,500 allowed on net taxable income of up to Rs5 lakh in a financial year. Those with net taxable income above Rs5 lakh will not enjoy the benefits of tax rebate.
- Standard deduction on taxable income for salaried class increased to Rs50,000 from Rs40,000 per financial year.
- Limit of exemption on gratuity amount has been increased to Rs30 lakh from Rs10 lakh.
- TDS deduction threshold of interest on bank deposits and post-office deposits raised to Rs40,000 from Rs10,000 per year.
- Investment in up to two houses allowed on sale of old property for rolling-over long-term capital gains under Section 54 of the Income Tax Act. The long-term capital gains on the sale of property should not exceed Rs2 crore and the benefit can be used only once in a lifetime.
- No tax shall be payable on notional rent on second self-occupied house.
- TDS threshold on house rent raised to Rs2,40,000 from Rs1,80,000.
- Farmers owning up to two hectares of land will get Rs6,000 per year as income support under new scheme Pradhan Mantri Kisan Samman Nidhi. The amount will be transferred in three tranches directly to the accounts of farmers.
- New pension scheme Pradhan Mantri Shram Yogi Mandhan to provide monthly pension of Rs3,000 after 60 years of age, with contribution of only Rs100 per month.
- Allocation to MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) increased to Rs60,000 crore for the FY 2019-2020 from Rs55,000 crore in the financial year.
- Businesses with annual turnover of less than Rs5 crore will be allowed to file their returns quarterly.
- Anti-camcording provision to be introduced to Cinematography Act to combat film piracy.
- Indian film-makers will benefit from single-window clearance for their films.
- Two per cent interest relief for farmers pursuing animal husbandry and fisheries.
- Benefits under Sec 80(i)BA being extended for one more year, for all housing projects approved up to the end of 2019-2020.
What does Mr. Rahul Gandhi, Congress President react to it?
Regd 6,000 per year benefit for Farmers, Rahul Gandhi, Congress President has tweeted as “5 years of your incompetence and arrogance have destroyed the lives of our farmers. Giving them Rs 17 a day is an insult to everything they stand and work for”.
We would come back with detailed articles about some of the tax exemptions provided in personal finance section in coming weeks.
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