Key Highlights of Union Budget 2019-20:- Indian Budget 2019-20

1. Direct Taxation – Budget 2019 Highlights

1. Interest deduction on housing loan under Section 80EE:-

Home Loan Interest on Self Occupied Property increased from Rs. 2 Lacs to Rs. 3.5 Lacs for loan taken upto 31st March 2020.

The Finance Minister has  increased the deduction that can be claimed for interest paid on Home loans taken for affordable housing by Rs 1.5 lacs to Rs 3.5 lacs per annum for houses costing of Rs 45 lacs.

The deduction is available on Home loans taken up to March 31, 2020.

This will provide a total benefit of Rs 7 lacs over a loan period 15 years.

2.Interchangeability of PAN No. and Aadhar Card:- 

For the benefit of taxpayers, PAN No. & Adhaar No. have now been made interchangeable. Income Tax return can be filed using Aadhaar Number without Pan No.

3. Discourage of Cash payment:- 

The Finance Minister proposes to levy tax deduction at source (TDS) of 2 percent on cash withdrawal of more than Rs 1 crore per annum from a bank account in one financial year to discourage business payments in cash. 

4. Sale of Electric Vehicles

Tax deduction of Rs 1.5 lakh would be extended to those taking loans for purchase of electric vehicles.

In order to give a boost to sale of electric vehicles, Finance Minister Nirmala Sitharaman has also proposed additional exemption of Rs 1.5 lakh on interest paid on auto loan taken for purchase of electric vehicles.

5.Enhancement of Surcharge on taxable income of Super Rich people

  1. Surcharge for individuals having taxable income from Rs 2 crores to Rs 5 crores increased to 18% from 15%.
  2. Surcharge for individuals having taxable income from Rs 5 crores to Rs 10 crores increased to 22% from 15% – FY 2019-20.

6. Tax relief to Small Company

The tax rate of 25% to be applicable to Companies having Turnover upto Rs. 400 crores increased from the current limit of Rs. 250 Cr; this would cover 99.3% of total companies in India and now only 0.70% of total companies in India would fall under the higher tax bracket.

7. Faceless Income Tax Assessment:- 

Faceless Income Tax Assessment in electronic mode is going to be launched in 2019 in a phased manner with the aim to reduce taxpayer trouble.

8. Angel Tax:-

To resolve the so called ‘angel tax’ issue, the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums.

The issue of establishing identity of the investor and source of his funds will be resolved by putting in place a mechanism of e-verification. With this, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department.

9.No change in personal Income Tax Rates.

10.Prefilled Income Tax Returns has been enabled for Salaries, Interest, Mutual Fund Income etc.

11. 35AD exemption has been extended to Li-On battery, Semiconductor, Laptops, Fabrication & Photo Volic.

2. Infrastructure-Budget 2019 Highlights

1. Finance Minister proposed the government envisions using rivers for cargo transportation, a move that will decongest roads and railways and said that the railway ministry is in the process of completing the ambitious dedicated freight corridor (DFC)

Railway infrastructure will need investment of 50 lakh crore between 2018 and 2030, Finance Minister said adding that Public Private Partnerships (PPP) will be used to unleash faster development and delivery of passenger freight services.

2.Projects such as industrial corridors, DFC, Bharatmala, Sagarmala and UDAN schemes have and will continue to improve connectivity and increase competitiveness.

3.Road corridor project Bharatmala, port-linked industrialization plan Sagarmala and UDAN will help in bridging the rural-urban divide and improve transport infrastructure.

4. The government has set an investment target of 80,250 crore for phase three of the Pradhan Mantri Gram Sadak Yojana, under which the government wants to build 1,25,000 km of village roads. 

5. With regard to power, Finance Minister said the government would focus on “one nation, one grid”. The government will introduce policy interventions to revive nearly 24GW of natural gas-powered power plants, currently stranded for the lack of natural gas supply.

The government will also “examine the performance so far of the Ujwal Discom Assurance Yojana (UDAY), which had been introduced to stabilize the financial bearings of state power distribution companies.

The Centre will also also look into the electricity tariff policy and tweak it to benefit the sector struggling to sign long-term power purchase agreements with states.

6.The country has raised 24,000 crore by monetizing public infrastructure, through infrastructure investment trusts, real estate investment trusts and the toll-operate-transfer scheme of the National Highways Authority of India.

7.To boost investment, the government will encourage foreign portfolio investors to invest in infrastructure debt funds, introduce credit default swaps for the infrastructure sector, deepen the corporate bond market, and encourage equity investment by non-residential Indians.

3. Education – Budget 2019 Highlights

1. Government to start ‘study in India’ programme to attract foreign students.

Finance Minister Nirmala Sitharaman during the Union Budget session said that three Indian institutions – two IITs and IISc – now figure in top 200 institutions in world university rankings and the government will start a programme ‘Study in India’ to encourage foreign students to study in Indian universities.

India has the potential to become the hub of education and the ‘Study in India’ programme will focus on bringing foreign students to the country.

2.Govt to focus on new-age skills for youth to get high-paying jobs

The government will focus on imparting new-age skills in areas like artificial intelligence, Internet of Things, big data, 3-D printing, virtual reality, and robotics to equip youth to take up high-paying jobs overseas.

3.National Sports Education Board under Khelo India scheme

The finance minister also said that a National Sports Education Board will be set up under the Khelo India scheme.

To sensitise youth about Mahatma Gandhi’s ideas, Sitharaman said a ”Gandhi-pedia” is being developed.

4.Dedicated Television Channel For Start-ups

Finance Minister announced plans to establish a television channel dedicated to start-ups.

The proposed channel will be broadcast from the Doordarshan platform and is to be aimed at inspiring and promoting start-ups across the country.

This shall serve as a platform for promoting startups, discussing issues affecting their growth, match-making with venture capitalists and for funding and tax planning.

This channel shall be designed and executed by startups themselves.

5. Setting Up of National Research Foundation

The Finance Minister announced setting up of National Research Foundation (NRF) to fund, coordinate and promote research in the country.

NRF will be chaired by Prime Minister Narendra Modi and co-chaired by Principal Scientific Advisor, Government of India.

It proposes better governance systems and focuses on research & innovation.

Propose to set up a new national research foundation. Funds available in all ministries will be integrated under NRF.

The new foundation will aim to build a “comprehensive collaborative mechanism between the Central and State governments, public agencies, research organisations, educational institutions and industries.

It will enable centralised funding and outcome monitoring mechanism, thus ensuring “coordinated research and innovation efforts, especially in problems areas critical for India and also globally relevant”.

4.MSME-Budget 2019 Highlights

1. A huge incentive in the form of 2% Interest Subvention for GST Registered MSMEs on all fresh & incremental business loans, Rs. 350 crores have been allocated by the Government on this account.

2. Pension benefits will be offered to 3 crore Shop owners with annual turnover of less than Rs 1.5 crore under new scheme called Pradhan Mantri Man Dhan Scheme.

3. The Government would create a new Payment platform for MSMEs to enable filing of bills and payment on this platform itself

5. Women Empowerment- Budget 2019 Highlights

1. Naari tu Narayani :- Finance Minister told that Govt. draw attention to the women of India, ‘Naari tu Narayaani’.

This government believes that we can progress, with greater women participation.”To further encourage women entrepreneurship, Women Self-help Groups (SHGs) Interest Subvention Programme to be expanded to all districts in India.

2. Every SHG Women having Jan Dhan Account – Rs. 5,000/- overdraft allowed.

3. Loan up to 1 lakh under Mudra Scheme for Women entrepreneurs.

6.GST- Budget 2019 Highlights

1. Rs 350 crore allocated for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans.

2.A simplified single monthly return being rolled out; taxpayers with annual turnover less than 5 crore need to file only quarterly returns.

3.Fully automated GST Refund module shall be implemented; multiple tax ledgers to be replaced by one;invoice details to be captured in a central system.

7. NRI- Budget 2019 Highlights

1. The announcement of Union Budget 2019 comes as a great relief for the non-resident Indians (NRIs) who hold Indian passport. They no more have to wait for 180 days on arrival to get their Aadhaar cards issued.

2.Finance proposed the merger of investments made through NRI portfolio route with the foreign portfolio investment.

The move will usher the single regime for foreign investors and regulate investments and funds brought in by the non-resident Indians and person of Indian Origin.

8. Banking and Financial Sector – Budget 2019 Highlights

1.Government considering to go below 51% to an appropriate level of ownership stake in non-financial public sector undertakings on case by case basis.

2.Public Sector Banks (PSBs) to be provided Rs 70,000 crore to boost capital and improve credit.

3.PSBs will use technology, enabling customer of one PSB to access service across all PSBs as well.

4. For purchase of high-rated pooled assets of financially sound Non Banking Finance Companies (NBFCs) amounting to Rs 1 lakh crore during 2019-20, one-time six-month partial credit guarantee to be given to PSBs.

5.Proposals for strengthening regulatory authority of RBI over NBFCs have been made.

6.Regulation authority over housing finance sector to be returned from National Housing Bank to RBI.

9. Electric Vehicles – Budget 2019 Highlights

1.Government has already moved GST council to lower the GST rate on electric vehicles(EV) from 12% to 5%.

2.Government will provide Rs 1.5 lakh income tax deduction on interest payments on loan taken for purchase of electric vehicles.

3.FAME II scheme aims to encourage faster adoption of electric vehicles by right incentives and charging infrastructure.

4.Customs duty on certain parts of electric vehicles being exempted to promote e-mobility.

10.Disinvestment-Budget 2019 Highlights

1.Strategic disinvestment of select Central Public Sector Enterprises will continue to be a priority; Strategic disinvestment of Air India will re-initiate; 1 lakh 5000 rupees is disinvestment target for 2019-20.

 

11.Rural-Budget 2019 Highlights

1. By 2022, every single rural family except those who are unwilling to take the connection, will have an electricity and a clean cooking facility.

2.In second phase of PMAY-Gramin, 1.95 crore houses to be provided to eligible beneficiaries, during 2019- 20 to 2021-22; they will have amenities such as LPG, electricity and toilets.

3. 10,000 new Farmer Producer Organizations to be formed to ensure economies of scale for farmers over the next five years.

4. SFURTI envisions 100 new clusters in 2019-20 to help 50,000 artisans economically.

 
12.Pension-Budget 2019 Highlights
 

Pension benefit to be extended to around 3 crore retail traders and shopkeepers with an annual turnover less than Rs 1.5 crore under Pradhan Mantri Karam Yogi Man Dhan Scheme.

 
13.Space-Budget 2019 Highlights

1.To harness India’s space ability commercially, a public sector enterprise, New Space India Limited (NSIL) has been incorporated to tap the benefits of Isro.

 

14.Social stock exchange-Budget 2019 Highlights
 

Electronic fundraising platform, a social stock exchange, to be set up to list social enterprises and voluntary organizations working for social welfare objectives.

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