Considering the financial needs of unserved sections of our society, RBI creates a new segment of banks called Small Finance Banks (SFB). It has the main objective of furthering financial...
Finally, the most awaited Union Budget 2019 of Second Modi Government is out. Finance Minister Nirmala Sitharam has presented the budget 2019 in the Lok Sabha on July 5, 2019. You can find the highlights and a detailed overview of the budget here. So continue reading until the end so that you don’t miss any crucial info.
But before we dig deep, let’s find out the key highlight of the union budget 2019 –
Key highlights of Union Budget 2019
- No change in personal income tax rates
- Petrol, diesel to get pricier: Govt. hike custom duty on fuel, gold, and precious items
- Increase in surcharge on the super-rich: 3% surcharge for Rs 2 crore income; 7% on Rs 5 crore and above
- 100% FDI for Insurance Broker and Insurance Web Aggregator
- Annual turnover limit for 25% Corporate tax has increased to Rs 400 crore from Rs 250 crore
- Taxpayers having an annual turnover of less than Rs. 5 crores need to file only quarterly
- Increment in the Direct Tax Revenue by 78%
- Additional deduction on home loans of Rs. 1 lakh
- PAN and Aadhaar have become interchangeable for filing ITR who don’t have PAN cards
- 2% TDS on withdrawals of Rs 1 crore in a year from bank accounts for business transactions
- Government has waived-off all the additional or MDR charges on cashless payment
Details of Union Budget 2019
The interim budget announced on 1st February 2019 by the interim Finance Minister Mr. Piyush Goyal has been revised. And the final union budget for the year 2019-20 has been announced by Nirmala Sitharam.
- There has been no change in personal income tax rates, Rs 5 lakh minimum limit for taxpayers.
- There’s an additional tax relief of Rs. 1.5 lakh on home loans.
- Companies with an annual turnover of Rs. 400 crores will now fall under the bracket of the corporate tax rate of 25%.
- Import duty on gold and other precious items increased to 12.5% from 10%.
- An increment of 5% customs duty on printed books and magazines.
- Additional deduction on the purchase of affordable houses on loan till 31st March 2020, Rs. 7 lakh tax benefits to home buyers.
- PAN and Aadhaar could be interchangeable. People without PAN can pay income tax using the Aadhaar Number.
Banking and Finance
- PSBs (Public Sector Banks) will receive Rs. 70,000 crore so that they can improve their credit and boost capital.
- Furthermore, they will be equipped with technology to allow customer of one PSB to access service across all PSBs as well.
- One time 6 months partial credit guarantee to PSBs will be given for purchases made on high-rate pooled assets of financially sound NBFCs (Non-Banking Financial Companies) which amounts to Rs. 1 lakh crores during FY 2019-20.
- NPAs of commercial banks have brought down to Rs. 1 lakh crore.
- 20 technology business incubators and 80 livelihood business incubators will be set up in FY 2019-20 under ASPIRE.
- In turn, it is expected to develop 75,000 skilled entrepreneurs in agro-rural industries.
- A television programme for Startups will be started on DD National. The start-ups themselves will design and execute this programme.
- The Sovereign external debt to GDP of India is less than 5%.
- Introduction of Rs. 20 coins soon.
- The government to start raising part of borrowing in foreign currency.
- Government external debt to GDP stands the lowest in the world.
- In the Financial Year 2019, the Fiscal deficit is found to be 3.3% of the GDP.
- For discouraging the business payments in cash, 2% TDS (Tax Deducted at Source) on the withdrawal of Rs. 1 crore or more in a year on business transactions.
- Extra charges on digital payment waived off- No MDR charges on cashless payment
Women Empowerment- ‘Nari tu Narayaani’
- For encouraging women empowerment, a campaign ‘Naari tu Narayaani’ has been launched. Through this, the government expects the country to grow and progress with a greater number of women participation.
- For encouraging women entrepreneurship, Women SHG (Self-Help Groups) Interest Subvention Programme will be started in all the districts across the nation.
- Under MUDRA Scheme, one woman from every SHG will be eligible to receive a loan of Rs. 1 lakh.
Research and Education
- Establishment of the National Research Foundation for funding, coordination, and promoting research in the country.
- Setting up NRF for reinforcing the overall research ecosystem in the country.
- Integrate the funds available under all Ministries with NRF.
- New National Educational Policy for transforming the Indian Educational System
- Rs. 400 crore under the head, World Class Institutions in 2019-20.
- Extension of Stand Up India Scheme to concentrate on skill development up to the year 2025.
- One Nation One Transport Card (Inter-Operable): Transport card like ATM for International travel on different modes of transport be it Road, Railways, Metro, Waterways, Airways.
- The MRO (Manufacturing, Repair and Operate) industry to be started soon.
- Use of PPP for the delivery of passenger freight services and faster development.
- For creating National Highways Grid, there would be comprehensive restructuring of National Highways Programme.
- India to enter into leasing activities as well as aircraft financing.
- An investment of Rs. 50 lakhs essential for railways infra between 2018 and 2030.
- Railways to invest more in suburban railways through SPV (Special Purpose Vehicles) like RRTS (Rapid regional Transport System), PPP (Public Private Partner).
- For modernizing the railway stations, the government will launch a massive program in 2019.
- 100% FDI (Foreign Direct Investment) for Insurance Broker and Insurance Web Aggregators.
- Government to inspect the opening up for FDI the sectors of the animation, comics (AVGC) industry, graphics, video, and aviation and media.
- In 2018, the global FDI reduced by 13% to $1.3 trillion from $1.5 trillion.
- However, Sitharama stated that in FY 2018-19, the FDI of India inflows at $64 billion which remained strong with a 6% growth over the previous year.
- Focus on bestowing new-age skills such as IoT, 3-D printing, Artificial Intelligence (AI), virtual reality, big data, and robotics.
- Motive is to prepare the youths for taking high paid jobs.
Ease of living
- Workers in the informal sector will now get Rs. 3,000 per month as pension.
- NRIs will have to get an Aadhaar card on their arrival in India.
Swachh Bharat Mission
- Swachh Bharat Mission to expand for undertaking solid waste management system in every village.
- By 2nd October 2019, India to become ODF (Open Defecation Free).
- With the motive of promoting Gandhian school of thought, Gandi-pedia will be developed.
Nirmala Sitharam abolished the colonial practice of bringing the Budget related documents in briefcase made of leather. Instead, she brought the documents in a four-fold red-cotton cloth called a ‘Bahi-Khata.’
The Maiden Budget 2019 has been presented considering a ten-year vision in mind. In the budget, the startups will get a complete set of tax benefits. Furthermore, the government has focused on strengthening infrastructure and foreign investment.
Apart from this, country’s most critical matter, Agriculture has received a big relief. The government is promoting zero budget farming. Education and Research, Transportation, Tax Rates, Ease of Living, etc. everything has been well covered.
However, the rest is yet to analyze. It will be confirmed in the upcoming days how this budget proves itself- whether it will lead to the development of the nation or not. Stay tuned to Swarit Advisors, we will keep you updated.