Highlights of the 2019 Budget Updates for You to Note in India
The objective of the 2019 budget presented by the Modi Government was to boost investment in the economy, which had been displaying signs of a slowdown. There were no significant changes in personal income tax rates, but the rich would have to pay additional taxes. The government attempted to foster growth by lessening corporate tax and giving incentives to startups and the housing sector.
Key Highlights of the 2019 Budget
The main focus areas of the 2019 budget are:
- Healthcare companies
- SMEs
- Agriculture
- Working-class – raise in the standard deduction
- Encouraging people to file their IT returns
- Generating more jobs
- TDS on fixed deposits and rent
- Defence sector
- To reduce tariffs on voice calls and data in the telecom industry
- Lesser income tax liability for small tax players
- Incentives for the middle-class
- GST implementation
Weak Areas of the 2019 Budget
- Changes not made to income tax slab rates
- Corporate tax has not been lessened
Let us study the impact of the 2019 budget.
Income Tax changes
- No tax for individuals earning income up to Rs. 5 lakh a year
- No tax on individuals with gross income up to Rs. 6.5. lakh if they invest in prescribed shares and provident fund
- Standard Tax deduction raised from Rs. 40,000 to Rs. 50,000 for salaried individuals
- Gratuity limit raised from Rs. 20 lakhs to Rs. 30 lakhs
- The rental income TDS limit was made Rs. 2.4 lakhs instead of Rs. 1.8 lakhs
- There will be an electronic assessment of tax within two years
- Income received in the form of interest from banks and post offices will not be taxed up to Rs. 40,000
- It will take only a day to process IT returns
- An increase in the maximum limit of TDS under section 194A, from 10000 to 40000
- Second self-occupied homes would be exempted from tax
- Increase in the capital tax benefit provided under section 54 from investment in one residential home to two
- The benefit received on the unsold stock has been raised from one year to two years
- The benefit received under section 80-1B has been extended by one more year – 2020
- There has been an increase in the limit for tax-free Gratuity from 10 lakhs to 20 lakhs
Impact on Agriculture Sector
- Rs. 1.7 lakh crores for food guarantee for everyone
- PM Kisan Yojana will get approval
- Haryana to open 22nd AIIMS
- MGNREGA allotted 60000 crores
- Each farmer has 2 hectares of land will receive Rs. 6000 per year from September 2018 onwards. The amount will be remitted in three instalments
- Exclusive department for fisheries to be made, and for farmers doing animal husbandry, there will be 2% interest subvention
- National Gokul Mission to be allocated Rs.750 crores and National Kamdhenu Ayog will be started for cows
- Farmers critically impacted by natural calamities to get 2% interest subvention, and on prompt repayment to receive an additional 3% interest subvention
Impact on GST and Indirect Tax
- Companies with less than Rs. 5 crores yearly turnover, with 90% GST payers, are permitted to return quarterly returns
- At least 14% GST revenue by the Central government to states
- MSME GST registered person will receive interest relief of 2%
- GST council has given suggestions for decreasing GST rates for home buyers
Effects on MSME Sector
- MSME registrants to receive 2% interest subsidy on loans not exceeding Rs 1 crore
- For the convenience of MSME registrants, a platform will be provided, called eMarketplace (GeM) to sell and market their products
- MSME sector to handle 25% of government projects, and women entrepreneurs to be allotted 3% of the projects
Impact of the 2019 Budget on Other Areas
- State share can now be up to 42%
- There will be no PCA restriction for three major banks
- Additional 2 lakh seats for the 10% reservation
- Rs. 3 lakh crores allocated for defence
- The workers who are getting a salary of Rs. 21000 monthly will receive a bonus
- As per Pradhan Mantri Shram Yogi Mandhan, workers older than 60 years in unorganized sectors receive a guaranteed monthly pension of Rs. 3000. In addition, there will be a contribution of Rs. 100 per month
- To empower women to work, they will have 26 weeks of maternity leave
- In the next five years, India will have more than one lakh digital villages.
- Under the Ujjawala scheme, six crores free LPG connections were delivered
- One Rank One Pension (OROP) to be started
- Indian filmmakers to get a single-window for approval
- Energy security will be provided by EVs leading to less dependence on oil imports
The 2019 budget is very ambitious and aims to bring digitalization to every nook and corner of India. It also aims to bring self-sufficiency by providing incentives to farmers to increase agricultural production. The budget focuses mainly on startups and MSMEs by providing them with various incentives to run their businesses. It also aims to reduce the tax load on the common man and attempts to pave the way for better economic development.
3E Accounting, with its vast experience and qualified team, is eager to help startups and other firms take advantage of the available incentives and to run their businesses profitably. We will help you register your business and guide you with all the necessary legal formalities. Our firm will provide all the assistance for business registration and help you to form and run your company successfully.
3E Accounting India
3E Accounting India is a corporate service provider and accounting firm assisting clients with company formation and incorporation. We offer company secretary and business-related services in India.
