What are the imperatives for our Finance Minister in this Union Budget?

5 July 2019
102 Views

India’s first woman Finance Minister, Nirmala Sitharaman, has her hands full. She will present the Union Budget for 2019-20 under Prime Minister Narendra Modi’s second Government term on July 5, 2019. The budget is expected to deal with falling economic growth and high r.....

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Budget 2019 Expectations – Highlights of the Last 5 Union Budgets

5 July 2019
145 Views

There is a palpable excitement in the air for the Union Budget 2019, scheduled to be presented by Finance Minister Nirmala Sitharaman on July 5. The Finance Minister of a heterogeneous country like India has an unenviable task of balancing the needs and aspirations of di.....

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Union Budget 2019 – Key Points That Can Drive Change

5 July 2019
78 Views

After a sweeping election victory, Indian Government is hoping to use the Union Budget to restart reforms across a range of sectors and tackle the country’s economic woes. The Budget comes at a crucial juncture - growth has slowed to a 5-year low of 5.8% in the first qua.....

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4 Points to Know as India Gears Up for the Union Budget

5 July 2019
65 Views

A day before the Union Budget Day, the Finance Minister of India presented the Economic Survey 2018-19. The economic survey outlines the state of the Indian economy along with the challenges that lie ahead, conducting sectoral overview to comment on reformed measures.

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Budget 2019 Update: Railway Budget Expectations and Impact on Indian Railways

5 July 2019
54 Views

This year, railway budget will be presented on July 5th in the parliament by the Indian Finance Minister alongside the Union Budget 2019. The NDA Government will be laying out the b.....

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Budget 2019 Expectations for the Indian Corporate Sector

5 July 2019
76 Views

With the Union Budget 2019-20 slated for July 5, we look at critical areas that corporate India would like solutions to.

 

The upcoming Union Budget 2019-20 has got corporate India looking forward.....

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Everything You Want To Know About the Upcoming Union Budget 2019

5 July 2019
134 Views

The Union Budget 2019 is just around the corner, and the expectations are sky high, especially since the current government came back to power following a bigger mandate than the first term. On July 5, Nirmala Sitharaman, who is the first full-time woman Finance Minister.....

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Budget 2019 Highlights and Key Takeaways

5 July 2019
203 Views

The anticipation for the Union Budget 2019 was high. A new Government is in place, the economy’s growth is sluggish, there are signs of rural stress, and consumption is slowing down.....

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How does the Union Budget affect taxpayers in India

6 July 2019
89 Views

India’s finance minister, Nirmala Sitharaman, presented the first Union Budget 2019 of Modi’s second government on Friday. She announced that the Indian economy will grow to a 3 tri.....

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Key Reforms From The New Government In Budget 2019

24 july 19
54 Views

Saying that the results of the parliamentary elections were stunning would be an understatement. The Bharatiya Janata Party led by Narendra Modi secured a historic majority in the lower house. A well-crafted communication strategy and efficient delivery of economic input.....

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Budget 2019 creates inroads for rural prosperity

24 jul 19
70 Views

The Modi-led Government's thumping victory in the recently concluded General Election was made possible by its narrative that assured the rural population a financial turnaround in the backdrop of a grave agrarian crisis. The rising distress in the country’s rural areas had become a key political.....

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Has the tax department finally eased up on startups?

24 july 19
65 Views

India is one of the fastest-growing start-up hubs in the world. It is currently home to about 39,000 active startups -- a five-fold increase from just a decade ago when the Indian startup ecosystem was in its infancy. Even so, startups continue to face regulatory and legal hurdles that impede the.....

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Is India’s telecom sector 5G ready?

24 july 19
70 Views

Wireless technology is the latest advancement in the area of communication technology. Most gadgets currently in use comprise of wireless technology at its core. It is the backbone of the tech world. Right from the ancestral First Generation (1G), wireless tech has come .....

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What direct tax reforms have in store for India’s taxpayers

24 july 19
50 Views

During its first term, the Narendra Modi-led NDA Government showed laudable perseverance in introducing one of the landmark taxation overhauls in the country, the Goods and Services Tax (GST), which has changed the face of the taxation structure in the country. Though th.....

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Why India needs to reduce its effective corporate tax rate: An analysis

24 july 19
77 Views

The Finance Minister of India, in the Budget 2019, announced a corporate tax cut of 5% — bringing it down to 25% from 30% — for companies that record an annual turnover of up.....

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Will the Government meet its divestment targets for the FY2020?

24 july 19
80 Views

While tax revenue showing only little enthusiasm, the centre is looking forward to banking on non-tax revenues to reduce its fiscal deficit down to 3.3 % of the gross domestic product in the current fiscal year 2019-20.

 

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What comes next for FinTech in India?

03 Aug 2019
34 Views

Financial technology (FinTech), which is the gamut of digitally-enabled banking and financial solutions, is a booming industry in India. According to the India FinTech Report 2019, India has 2,035 FinTech startups, the second largest in the world after the US. Over the c.....

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Explained: How the government manages fiscal deficit

24 july 19
66 Views

On July 5, India’s first full-time female Finance Minister Nirmala Sitharaman presented the Union Budget 2019. A country’s budget is similar to a household budget. Just like every h.....

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What the government can do to support India’s aviation sector

24 july 19
89 Views

India is the fastest-growing domestic aviation market in the world. In any other country, rapid passenger growth would mean booming business for airlines. But in India, the oldest private airline halted operations around three months ago due to a shortage of cash. Rapid .....

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Budget 2019 - What to Expect From the Upcoming Union Budget?

 

If you are looking for the latest budget news, you won’t have to wait for long. The Union Budget 2019 date has been set for July 5 by the Central Government. It will be presented by Finance Minister Nirmala Sitharaman, who is set to make history for being the first full-time woman finance minister to present the union budget 2019. In order to get a sense of the broad policy trajectory she may opt for, it is essential to look back at the template set by the stand-in finance minister Piyush Goyal in February's interim budget.

Key Takeaways from the Interim Budget

The Interim Budget 2019, presented by the then Finance Minister Piyush Goyal on 1st Feb 2019, was a combination of some smart political moves and focused economics. The budget was highly focused on the vast urban and semi-urban middle class, the farmer, the newly sprouting MSMEs and the real estate sector at large. It included a major relief for individual taxpayers with the increase in rebate, applicable under Section 87A of the Income Tax Act, as well as the farmers of India in the form of a PM Kisan scheme. Here are the key takeaways from the interim budget:-

Income Tax Slabs and Benefits FY 2019-20

The interim budget 2019 included several benefits for the common man in the urban and semi-urban areas. Effective from April 1, 2019, anyone having a taxable income up to Rs 5 lakh per annum, need not pay any tax. However, this tax benefit will be rolled out in the form of a rebate and not an exemption.

Illustration 1 – If you presently earn an income of Rs 5 Lakh per annum, you will be taxed at 5%, which amounts to Rs 25,000. However, when you file your tax returns, Rs 25,000 will be given back to you entirely as a rebate. In addition, the standard deduction has been increased from Rs 40,000 to Rs 50,000 annually, which reduces the taxable income significantly.

Illustration 2 – If your current income is Rs 10 Lakh per annum, you can still pay zero tax, here’s how:

·         Claim Rs 2 Lakh under Section 24 for interest paid on home loan.

·         Claim Rs 1.5 Lakh for investments under Section 80C such as ULIPs, EPF and Tax-Saving FDs etc.

·         Claim Rs 50,000 as health insurance cover.

·         Invest Rs 50,000 in NPS scheme and claim it.

·         Claim Rs 50,000 as standard deduction.

Tax Deductions

Claim Amount (Rs)

ULIPS

1,50,000

Standard Deduction

50,000

NPS

50,000

Interest paid on home loan

2,00000

Total Deduction

5,00,000

 

Once, your taxable income is down to Rs 5,00,000; you need not pay any tax. It’s also important to note that HRA tax deduction has not been considered in the above illustration. If HRA is considered, the tax benefit can be higher. The whole point of these illustrations is to understand how exemptions can incentivize you as a taxpayer and help you create wealth simultaneously.

Budget 2019 – Education Sector

The interim budget allocated a total of Rs. 93,847.64 Crore to provide qualitative education for all. 25% of additional seats were created in educational institutions to meet the 10% reservation for the poor. Also, the total budget allocation of Rs.37, 461 Crore was proposed for higher education.

Budget 2019 – Infrastructure Sector  

Northeastern states like Mizoram, Meghalaya and Tripura to be included on India’s rail map for the first time. Container cargo movement improved because of navigation channels through the river, Brahmaputra.

Budget 2019 – Medium, Small and Micro Enterprises

The ministry of MSME allocated a budget of Rs. 7,011 Crore for 2019-20. A 2% interest subvention on an incremental loan of Rs 1 Crore for GST registered SMEs was introduced. At least 3% of the 25% sourcing for the Government undertakings will be reserved for SMEs owned by women. Additionally, Rs. 2,327 crore was allocated under the Prime Minister Employment Generation Programme (PMEGP).

Budget 2019 – Women’s Development

The budget for the Integrated Child Development Scheme (ICDS) increased by over 18% to Rs. 27,584 crore. Moreover, Rs. 1,330 Crore was allocated in the Interim Budget 2019-20 for the Mission for Protection and Empowerment of Women.

What to Expect from the Union Budget 2019

There are several expectations from the upcoming union budget regarding income tax relief. Leading financial analysts have predicted that the new financial budget will be pro-growth and tax sops will act as a stimulus to an economy that has slowed sharply this year. Here’s what to expect from the Union Budget this year:-

Budget 2019 – Higher Income Tax Exemption Limit

The tax exemption limit for individuals may be raised to Rs. 3 Lakh of their annual income, up from the current Rs. 2.5 Lakh. In case the proposed tax move is implemented, it will put at least Rs. 2,500 more in the hands of taxpayers.

Budget 2019 – Higher tax relief on NPS withdrawal

Last year, the Indian Government had hiked the tax exemption limit for lump sum withdrawal on exit from National Pension Scheme (NPS) to 60%. Currently, 20% of the accumulated corpus withdrawn by NPS subscribers is taxable. With the upcoming budget, the entire corpus is expected to be completely exempt from tax. If this change is implemented, NPS will get the exempt, exempt and exempt or EEE status.

Budget 2019 – Higher Section 80C and Section 80D Deduction Limit

In order to encourage savings and investments, the finance ministry is expected to raise the tax exemption limit for Section 80C of the Income Tax law. Currently, the limit is set at Rs. 1.5 lakh. Moreover, given the ever-rising inflation levels and steep medical expenses, financial policymakers may consider increasing the deduction under Section 80D to Rs. 35,000 from the current Rs. 25,000. This move will ensure the affordability and accessibility of medical treatment to all class of patients.

Budget 2019 – Re-Introduction of Tax-Free Bonds

The upcoming budget may bring back tax-free bonds to raise capital by government entities for infrastructure projects. Unlike regular bonds, interest earned on tax-free bonds is exempt from tax and have a long-term maturity of typically ten years or more.

Budget 2019 – Higher LTCG limit

The government may increase the threshold limit of LTCG (Long-Term Capital Gains) from the current limit of Rs. 1 Lakh per financial year for sale of listed equity shares and units of equity-oriented mutual funds. The Finance Act, 2018 introduced new changes to the capital gains taxation regime wherein tax was levied on long-term capital gains (LTCG) exceeding Rs. 1 lakh, which were full exempted previously. These changes have been effective from 1st February 2019.

The major focus of the union budget 2019 is likely to be on boosting domestic consumption, addressing the rural crisis and supporting the budding micro, small and medium enterprises. Overall, the union budget is expected to bring about some big changes in the national economy. What remains to be seen is whether Finance Minister Sitharaman will be able to deliver on the promises made by the newly formed government.

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