The recently announced Union Budget 2019 saw the Finance Minister announcing certain pragmatic changes along with a financial vision for the decade. With India now becoming the 6th largest economy in the world, this year’s Union Budget held a special interest for people working in various sectors of the economy. Major reforms included in areas like income tax, women and youth development, defence, agriculture, GST, customs, labor, infrastructure and several government schemes for poor economic classes.
This article highlights some of the important budget updates to look for-
Income Tax Highlights
- There have been no major changes in the income tax slabs. However, the taxes levied on high-income earners in India is likely to increase.
- For cash withdrawals of more than one crore, a TDS of 2% will be charged
- An increase in the surcharge for people earning between INR 2 crores and 5 crore
- A tax subsidy for INR. 1.5 lakhs for taxpayers taking a personal loan for buying electric vehicles
- Proposal for INR. 1.5 lakh deduction on affordable housing loans up to INR 45 lakhs
- Low corporate tax of 25% to companies with a yearly turnover of INR. 400 crore
- A good news for people thinking about venturing into start-ups as there would be no income tax scrutiny over valuation of their share premium on the declaration and information provided.
- In view of providing financial support to women entrepreneurs, the government has announced a proposal to expand the women Self Help Group (SHG) interest subvention program to all districts.
- Under this initiative, every verified SHG members having a Jan Dhan Bank Account will become eligible for INR. 5000 overdraft.
- Under the MUDRA scheme, every woman in every SHG will become eligible for a personal loan up to INR. 1,000,00.
- The budget also proposed 6 crores free LPG connections under the Ujjwala Yojna
- The maternity leave has been extended up to 26 weeks with several provisions made for pregnant women under the Pradhan Mantri Matru Vandana Yojana
Skill Development Initiative for Youths
- The Finance Minister proposed a plan to make India a major educational hub in its ‘vision for the decade’. To make this a reality, the government proposed a ‘Study in India’ initiative allocated INR 400 crore for world-class higher education institutes.
- Furthermore, the budget highlights the importance of improving skills in areas of artificial intelligence, robotics, and big-data. This move is taken to improve the skill-sets of Indian youths and ensure high-paying jobs for them in India and abroad.
The budget 2019 highlighted the need to strengthen the governance in Public Sector Banks. With respect to that, the following are the key highlights to watch out for-
- Reduction in NPAs of commercial banks by over 1 lakh crore over the previous year
- 70,000 crore of capital boost for credit improvement due to the consolidation of Public Sector Banks
- NBFCs to get funding of 1 lakh crore over the current financial year
- The RBI has proposed to strengthen its regulatory authority over NBFCs.
Other Key Takeaways
- Assured yearly income for 12 crore small and marginal farmers up to INR. 6000 per year under the Pradhan Mantri Kisan Yojana.
- GST registered small and medium-sized enterprises to enjoy 2% interest subvention on incremental loan of INR 1 crore
- More electricity connection in households under Saubhagya Yojana
- International Solar Alliance for promoting renewable energy
- Hike in military pay service
- Revocation of custom duties on 36 capital goods
To know more about the key highlights of Union Budget 2019 and its impact on your personal loans, insurance, investments, and EMIs, get in touch with our experts at Finserv MARKETS.
Also read about PMAY reforms and tax benefits in Union Budget 2019.
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