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Pallavi Lakshmi Lakra

Pallavi Lakshmi Lakra | Updated: Jul 05, 2019 | Category: Legal, Recent News

Union Budget 2019: No change in Personal Income Tax Rates

On 5th July, 2019, the Finance Minister of India, Nirmala Sitharaman presented the Union Budget, 2019 for the financial year of 2019-2020. This time the government has not changed the personal income tax rates.

Hailing the Budget, Prime Minister Narendra Modi said, “It is a citizen-friendly, development-friendly Budget.”

Budget 2019

In her maiden budget speech, Nirmala Sitharaman said the government is planning to introduce new laws for affordable housing, interest subvention schemes for MSMEs, women related schemes and additional surcharge for the super-rich class. No changes in the personal income tax rates were introduced this year. The main focus of this budget was to boost the infrastructure and foreign investment.

In her speech which gave a decade long plan, she said the Indian economy would become a $3 trillion economy by the end of financial year itself. Let’s look at the key highlights of the budget.

Key Highlights in different sectors-

Following are the main highlights of the budget

Taxes

  • The Annual turnover limit has now increased to Rs. 400 crore for 25% Corporate tax from Rs. 250 crore.
  • There was no change in personal income tax rates, with Rs. 5 lakh still the minimum limit for taxpayers.
  • The Finance Minister increased the surcharge on the super-rich. For people with 2 crore income a 3 % surcharge and 7 % surcharge for income slab of ₹ 5 crore and above.
  • It allows interchangeability of PAN card and Aadhaar for ITR purpose for those who don’t have PAN cards.
  • For discouraging payment in cash, the government will now levy 2% TDS on cash withdrawal, which is exceeding ₹ 1 crore in a year from a bank account.
  • It also proposed to issue Aadhaar card for NRIs with Indian passports after their arrival in India.
  • There will be increment in direct tax revenue by a total of 78%.

GST

  • Taxpayers with an annual turnover of less than Rs. 5 crores can now file GST return quarterly.
  • The government has introduced an automated GST refund module for streamlining GST refunds.
  • Furthermore, it also plans to introduce an electronic invoice system.

Housing

  • RBI becomes the regulating authority for the housing sector.
  • There is an additional ₹ 1.5 lakh tax relief on home loans for the purchase of house up to ₹ 45 Lakh.
  • An additional income tax deduction of ₹ 1.5 Lakh on the interest paid on loans taken to purchase electric vehicles.

Economy

  • The Indian economy will become a $3 trillion economy by the end of the financial year.
  • The Fiscal deficit for financial year 2019 is found at 3.3% of the GDP.
  • India’s external debt to GDP is at 5%. The government is planning to raise a part of its gross borrowing program in external markets in external currencies.
  • The government is planning to start raising part of the borrowing in foreign currency.

Women empowerment: Nari Tu Narayaani

  • For encouraging the concept of women empowerment, a campaign ‘Naari tu Narayaani’ is being launched. Through this the government plans to increase women participation in countries growth.
  • For encouraging women entrepreneurship, the Women Self Help Group Interest Subvention Programme will be expanded to all districts in India.
  • Additionally, the government will provide 1 lakh loan to members of these programs.

Banking reform

  • The Public Sector Banks after the budget 2019 will receive Rs. 70,000 crore for improving their credit and boost capital. 
  • For the purchase of high rated pooled assets of Non-Banking Finance Companies worth ₹ 1 Lakh crore rupees, a onetime six-month partial credit guarantee is to be given to public sector banks.
  • A new series easily identifiable to the visually impaired will be released for public use.
  • The Non Performing Assets of commercial banks have been brought down to Rs. 1 lakh crore.

MSMEs

  • The government, through Union Budget 2019, proposed easing tax for start-ups.
  • It provides a 2 % interest subvention for all the GST registered MSME on new or incremental loans.
  • It also proposed to continue the ‘Standup India’ scheme until 2025.
  • Introduction of new payment platform for MSMEs.

Finance

  • 100 % FDI will now be permitted for the insurance intermediaries in India.
  • The government is planning to relax norms for single-brand retail sectors.
  • It is going to open FDI in the aviation, animation AVGC, insurance and media sector.
  • The statutory limit for the FPI investment is to be increased from the previous 24% to the sectoral foreign investment limit. The corporate will be given the option to limit the lower threshold. 
  • Cash withdrawals which are over Rs. 1 crore a year are to be taxed at 2%.

Business & Entrepreneurship

  • The government will set up an electronic fundraising platform, a social stock exchange, for listing social enterprises and voluntary organizations that are working for social welfare objectives.
  • For easing the credit access, MSMEs can now get a loan up to 1 crore within 59 minutes. 
  • Pradhan Mantri Karam Yogi Maadhan Scheme-Pension scheme implemented for traders and small shopkeepers whose annual turnover is less than Rs. 1.5 crore.

Employment

  • For financial year 2019-2020, 20 technology business incubators and 80 livelihood business incubators will be set under ASPIRE.
  • A television programme will start on DD National for Startups. The startups will themselves design and develop the programme.

Education

  • For the Financial Year 2019-2020 Rs. 400 crore is to be provided under “World Class institution”.
  • Government also plans to introduce “Study in India” plan to bring foreign student in India for higher studies.

Living

  • The government will enact new rental laws to promotes rental living.
  • Workers belonging to the informal sector will now get a pension of Rs. 3000 per month.

Rural

  • The government has built 9.6 crore toilets since 2014. More than 5.6 lakh villages in India have become open defecation free. The government proposed to expand the Swachh Bharat mission for undertaking sustainable solid waste management in every village.
  • It is estimated that India will become Open defecation free by October 2nd, 2019.
  • Every rural family will have electricity and clean cooking gas. (except for the ones unwilling to take the connection)

Agriculture

  • The government is planning to invest widely in the agricultural infrastructure and support private entrepreneurship.

Transportation

  • Union Budget, 2019 introduces inter-operable one nation one transport card for a universal trip on various modes of transport be it metro, road or railways.
  • PPP will be used for unleashing faster development and delivery of passenger freight services in India.
  • The government is also planning a comprehensive restructuring of the National Highway Programme for creating a National Highway Grid.
  • The MRO ( Manufacturing, Repair, and Operate) industry will start soon.

Railways

  • The government has proposed an investment of Rs. 50 lakhs essential for building railway infrastructure.
  • Moreover, the government will invest more in suburban railways through Special Purpose vehicles (SPV) like Rapid Regional Transport system (RRTS) and Public Private Partner (PPP).

Abolishing colonial practice: Bahi-Khata

  • The first women Finance Minister abolished colonial practice for bringing budget in a briefcase made of leather. She brought the union budget of 2019 in a four fold red cotton cloth called Bahi-Khata.

Conclusion

The Union Budget was introduced to cater to the needs of growing India. Let’s hope it addresses all the issues faced by the people and boost the Indian economy.

For more information contact us at LawyerINC.

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Pallavi Lakshmi Lakra

Pallavi Lakshmi Lakra

Pallavi is a Legal Associate at Lawyerinc. She is graduated from Gujarat National Law University having areas of expertise in Legal and financial content writing. She is having keen interest in legal research, drafting and legal advisory. She likes to keep herself updated with the changing face of legal arena.


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