Introduction-to-Budget-2019

Budget 2019 Highlights | Interim Budget 2019-20

Acting Finance Minister Sh. Piyush Goyal has presented the interim budget for Financial Year 2019-2020. The Key highlights and its analysis is given as below:

1. What is the new Tax slab for FY 2019-2020?

We all have been heard about that the taxes for the FY 2019-20 is free upto Rs. 5 Lakhs but there is a twist with the tax slabs it is remain unchanged. It leaves so much queries for a tax payer. According to Budget 2019 Tax Slabs is the same as it was in previous FY 2018-19 which is as per below:

Tax Slabs for FY 2019-2020
  • Income up to Rs. 2,50,000                      ———->  Nil
  • Income above 2,50,000 to 5,00,000      ———-> 5%
  • Income above 5,00,000 to 10,00,000    ———-> 20%
  • Income above 10,00,000                        ———-> 30%

Important Note:

A rebate under chapter 87 (A) with full exemption of tax for tax payer whose income is up to Rs. 5,00,000 is being introduced.

According to budget 2019, it is very clear that an Individual tax payers whose taxable income (after all deductions) is up-to Rs. 5,00,000 will be not paying any taxes for FY 2019-2020. Which gives immense pleasure and relief to around 50%-60% of taxpayers in the country since majority of income tax payers are fall in this category. This sounds great for all the low and lower middle income group.

But an individual is need to be careful as if his/her income exceeds Rs. 5,00,000 (after all deductions) then he/she will pay more taxes than the person whose income is up to Rs. 5,00,000. 
e.g. If a person’s income after all deductions is Rs. 5,00,001 then he/she will be paying a total tax of
Rs. 12500.20 + 4% Cess (Health & Education cess).

Tips: To prevent from extra burden of tax an individual should invest in tax saving instruments and other schemes which qualify for deductions under chapter VI A.

2. What is new Standard Deduction for FY 2019-20?

In our previous article we had discussed about the standard deduction in details. In this Interim Budget 2019 Standard deductions has been increased from Rs. 40,000 to Rs. 50,000.

This deductions has given some relief to Tax payer as they can save extra deductions of Rs. 10000 as compare to  previous financial year.

3. What is new TDS limit on Bank deposits or post office savings for FY 2019-20?

If one is getting income from Post Office savings or Bank deposits then Post Office or Banks deduct earlier  a TDS of 10% when the total interest exceeds Rs. 10,000. In budget 2019 it has been proposed that Banks or Post Office will not deduct TDS up to the interest amount of Rs. 40,000.

This new TDS limit has provided only to allure tax payers that their tax is not deducted at source however if the person falls in Income tax category then these interests will be taxable under the head Income from other sources. 

Tips: If an individual who does not fall under Income tax category he/she can also submit Form 15G/H to instruct Bank or Post Office not to deduct TDS.

4. What is PM Mudra Yojana for FY 2019-20?

This budget has been also come up with ‘PM Mudra Yojana’ for start-up and young entrepreneurs. providing loans upto 10 lakh to the non-corporate, non-farm small/micro enterprises. These loans are classified as MUDRA loans under PMMY. These loans are given by Commercial Banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs and NBFCs.
The borrower can approach any of the lending institutions mentioned above or can apply online through this portal. Under this scheme 15.56 crores of loans are already disbursed. The scheme has an aim of Rs. 7.23 Lakh crores to be disbursed.

According to budget 2019 the young entrepreneurs especially women are facilitated with this scheme. This is good news for start ups who want to start their own company. Through this we can understood in a better way that PM focus is to encourage start up in India so such schemes has been launched to promote it.

5. Other general key highlights of Budget  for FY 2019-20?

  • This budget also brings good news for the businesses which are into affordable housing scheme. According to Budget 2019 such business will get benefits of 100% deductions on profits from such project under section 80 IBA has been extended to the next year i.e. till 31st March 2020.
  • It has been also announced Rs. 60,000 crores under MGNREGA ( Mahatma Gandhi National Rural Employment Guarantee Act 2005) to aim an objective of ‘Right to Work’ and ‘Livelihood Security’.
  • Also this budget has been highlighted some of the highlights of ‘PM Ujjwala Yojana’ with an aim to provide the cleaner fuel to Indian Home. According to this scheme 8 crores of LPG connections has been promised to deliver out of which 6 crores are already delivered.
  • This is a relief for residential property owner on self occupied housing property. Earlier before Budget 2019 if a person own more than one property then he/she has to pay tax on the second residential property. But in the Budget 2019 it has been proposed there will be no tax on the second self occupied property which is a good news for people.
  • Also it has been proposed that if a person who is not an individual or HUF is living in rented property then it was mandatory to make TDS. Earlier the TDS threshold limit was Rs. 1,80,000 but it has been increased to Rs. 2,40,000 in the Budget 2019.
    i.e. earlier the TDS was applicable once rent exceeded Rs. 15,000 in a month but now it has been increased to Rs. 20,000 and above in a month.
  • This budget enhanced the section 54 exemption on long term capital gains for an individual who sells a residential property and buy another residential property.
    This benefit has been increased to two residential property having a capital gains up to Rs. 2 crores only once in lifetime.
  •  Minimum Assured Pension: Each subscriber under the PM-SYM (Pradhan Mantri Shram Yogi Maandhan Yojana) , shall receive minimum assured pension of Rs 3000/- per month after attaining the age of 60 years.This scheme is only for lower income group whose income is up to Rs 15,000 monthly under which the equal contribution from government side will be contributed. It is quite similar to Atal Pension Yojana.
  • Rs. 35,000 crore has been allocated for defence personals under ‘One Rank One Pension’
  • Rs. 75,000 has been allocated to agriculture sector to benefit more than 12 crore farmers who will be benefited a direct income of Rs. 6,000 annually under  ‘Pradhan Mantri Kisan Samman Nidhi’. Also it has been proposed to provide Minimum Support Price (MSP) for all 22 crops fixed at 50% more than the present cost.

According to Budget 2019 it has been clearly understood that it has been focused on every segment of the individual whether  salaried, Businessman, Kisan, Small business owner, Defense person, household or property owner. It has been targeted everyone. We can say it is Budget for everyone.

Thank you!  for spending your time with us through this post. Hope this add on value to your knowledge stack. You can leave your valuable feedback through commenting on this blog post.

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