Middle class gets tax relief, farmers assured income in election budget
New Delhi:Finance Minister Piyush Goyal rolled out the government’s last budget ahead of this year’s national elections, announcing no tax on income up to Rs 5 lakh, a Rs 75,000 crore assured income scheme for small farmers and a mega pension scheme for workers in the unorganised sector. The initiatives are designed to woo the middle class, address farm distress and boost private investment in an effort to shore up the political base of ruling BJP-led national coalition that has been accused by the opposition of not delivering on its promises to the poor.
“India is solidly back on track and marching towards growth and prosperity,” Piyush Goyal said early in his budget speech, asserting that the government had succeeded in “we have broken the back of back-breaking inflation”.
He said the Narendra Modi government’s success in controlling inflation had put more money in the hands of people. “Inflation is a hidden and unfair tax, from 10.1 per cent during 2009-14,” he said.
Goyal announced exemption from tax on income of up to Rs 5 lakh per annum, which goes up to Rs 6.5 lakh if the individual tax payers invest Rs 1.5 lakh in provident fund and prescribed equities. He also proposed to increase the standard deduction from the existing Rs 40,000 to Rs 50,000. The proposal will benefit 3 crore middle class tax payers.
The TDS (tax deduction at source) threshold on interest from bank, post office deposits has been raised from Rs 10,000 to Rs 40,000. The finance minister further proposed to increase the TDS?threshold on rental income from Rs 1.8 lakh to Rs 2.4 lakh.
The BJP-led ruling National Democratic Alliance (NDA) is facing discontent over depressed farm incomes and doubts over whether his policies are creating enough jobs.
The interim budget allocates Rs 600 billion for a rural jobs programme and Rs 190 billion for building of roads in the rural areas.
Goyal said Rs 6,000 per year assured income support will be given to small and marginal farmers having less than two hectares of land. He announced a new fund, ‘Pradhan Mantri Kisan Samman Nidhi’ for disbursement of cash to “vulnerable farmers”.
Around 12 crore farmers will receive Rs 6,000 per annum under the PM Kisan scheme. The money will be transferred into bank accounts of farmers in three equal instalments. The finance minister said Rs 20,000 crore have been provided for current fiscal, 2018-19 under PM Kisaan scheme.
The government unveiled a mega pension scheme for the unorganised sector workers with an aim to benefit 10 crore people. Goyal said the beneficiaries will get assured monthly pension of Rs 3,000 after reaching the age of 60 years.
“We are launching Pradhan Mantri Shram Yogi Mandhan today. The scheme will provide assured monthly pension of Rs 3,000, with contribution of 100 rupees per month, for workers in unorganised sector after 60 years of age,” Goyal said.
The fiscal deficit would be 3.4 per cent of gross domestic product (GDP), slightly higher than the targeted 3.3 percent, said Goyal, who presented the budget as Union minister Arun Jaitley is undergoing medical treatment in the United States.
Goyal told the Lok Sabha that direct tax collections increased from Rs 6.38 lakh crore in year 2013-14 to almost Rs 12 lakh crore this year with a growth of 80 per cent in tax base. The number of income tax returns filed increased from 3.79 crore to 6.85 crore over the same period, he said.
On job creation, the finance minister said, “EPFO shows two crore accounts in two years. This shows formalisation of the economy. When there is such a high growth, jobs are created.” The government is facing sharp criticism from the opposition over a ‘leaked report’ claiming that unemployment rate is at a 45-year high.
The interim budget is likely to be followed by a full one in July after the Lok Sabha elections. The interim budget projected the economic growth for the fiscal year 2019-20 to be around 7.5 per cent.
Highlights of Interim Budget 2019-20
1. Within 2 years, Tax assessment will be done electronically 2. IT returns processing in just 24 hours 3. Minimum 14% revenue of GST to states by Central Govt. 4. Custom duty has abolished from 36 Capital Goods 5. Recommendations to GST council for reducing GST rates for home buyers 6. *Full Tax rebate upto 5 lakh annual income after all deductions.* 7. Standard deduction has increase from 40000 to 50000 8. Exempt on tax on second self-occupied house 9. Ceiling Limit of TDS u/s 194A has increased from 10000 to 40000 10. Ceiling Limit of TDS u/s 194I has increased from 180000 to 240000 11. Capital tax Benefit u/s 54 has increased from investment in one residential house to two residential houses. 12. Benefit u/s 80IB has increased to one more year i.e. 2020 13. Benefit has given to unsold inventory has increased to one year to two years.
14. State share has increased to 42% 15. PCA restriction has abolished from 3 major banks 16. 2 lakhs seats will increase for the reservation of 10% 17. 60000 crores for manrega 18. 1.7 Lakh crore to ensure food for all 19. 22nd AIIMS has to be opened in Haryana 20. Approval has to be given to PM Kisan Yojana 21. Rs. 6000 per annum has to be given to every farmer having upto 2 hectare land. Applicable from Sept 2018. Amount will be transferred in 3 installments 22. National kamdhenu ayog for cows. Rs. 750 crores for National Gokul Mission 23. 2% interest subvention for farmers pursuing animal husbandry and also create separate department for fisheries. 24. 2% interest subvention for farmers affected by natural calamities and additional 3% interest subvention for timely payment. 25. Tax free Gratuity limit increase to 20 Lakhs from 10 Lakhs 26. Bonus will be applicable for workers earning 21000 monthly 27. The scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs. 3,000 with contribution of Rs. 100 per month for workers in unorganized sector after 60 years of age. 28. Our government delivered 6 crores free LPG connections under Ujjawala scheme 29. 2% interest relief for MSME GST registered person 30. 26 weeks of Maternity Leaves to empower the women 31. More than 3 Lakhs crores for defence 32. One lakh digital villages in next 5 years 33. Single window for approval of India film makers.