India
This budget punctured the Opposition narrative at several levels, and for everything socio-economic class of the nation.
The Modi government has delivered a game-changer budget that stands to his maxim of ‘Sabka Saath, Sabka Vikas’ just ahead of the general elections. Something for someone, was the underlying principle of the annual financial statement for 2019-20.
This budget punctured the Opposition narrative at several levels, and for everything socio-economic class of the nation.
First and foremost, the budget took farmers’ distress head-on with the Pradhan Mantri Kisan Samman Nidhi. The government announced that farmers would get Rs 6000 per year in three installments of Rs 2000 each. This amount would come over and above the minimum support price (MSP) which the government has already hiked for over 22 crops. This assured income would be guaranteed to such farmers who own less than 2 hectare land. Almost 12 crore farmers would be benefited from this.
While the government announced a budget of Rs75,000 crore for implementing the scheme for the year 2019-20. To implement the scheme with retrospective effect from December 1, 2018, the government announced another Rs 20,000 crore.
Farmers affected by severe natural calamities would get 2% interest subvention and additional 3% interest subvention upon timely repayment.
Another 2% interest subvention was announced to farmers pursuing animal husbandry and fisheries.
The government also announced that digital infrastructure would be developed in villages to convert them into ‘digital’ villages
In the unorganised sector, the government declared a new pension scheme which would benefit 10 crore workers — from house-maids to scavengers. In what could become the world's biggest pension scheme for unorganized sector workers in the next five years, a new pension scheme, called ‘Pradhan Mantri Shramyogi Mandhan Yojana, has been started.
It would provide assured monthly pension of Rs 3000 per month when the workers attain the age of 60 years. The workers would have to contribute only Rs 100 per month.
Also, the gratuity limit has been increased from Rs 10 lakh to Rs 30 lakh. The government would now contribute to the New Pension scheme 14%, up from previous 4%.
In a path-breaking development, individual taxpayers with annual income up to Rs 5 lakh would now get full tax exemption. This limit was earlier Rs 2.5 lakh.
Individuals with gross income up to Rs 6.5 lakh would also not need to pay any tax, if they make investments in the Provident Fund and other prescribed schemes.
The standard tax deduction for salaried persons raised from ₹40,000 to Rs 50,000.
The TDS threshold on interest on bank and post office deposits has been raised from Rs 10,000 to Rs 40,000.
Also, the TDS threshold on rental income increased from Rs 1.8 lakh to Rs 2.4 lakh.
The government has promised I-T processing of returns to be done in 24 hours.
As another strike on institutional corruption, the government announced that within the next two years all verification of tax returns will be done electronically without any interface with the taxpayer.
Around 3 crore middle-class taxpayers will get tax exemption on account of the new income tax slabs which have been announced.
The benefit of rollover of capital tax gain has been increased from investment in one residential house to two residential houses for a taxpayer having capital gains up to Rs 2 crore. This benefit can be exercised once in a lifetime.
Benefits under Sec 80(i)BA have been extended for one more year, for all housing projects approved till the end of 2019-2020.
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