Saturday, 6 July 2019

Highlights from Union Budget 2019 -20

Budget for the year 2019-2020 was announced today, by the new Finance Minister, Nirmala Sitharaman, under the newly elected BJP government. For the past few years, it has been Arun Jaitley who was the Finance Minister and the
one to present the budget for the financial year.

The Finance Minister has spoken about a lot of factors in the budget, from MSMEs and railways to women empowerment and income taxes. Here are key highlights of this Budget :-

Railways

Finance Minister Nirmala Sitharaman spoke about implementing the PPP, Public-Private Partnership, which will bring about faster development of the the overall situation of the infrastructure of the railways. 

As the Indian Railways needs an investment of about Rs. 50 lakh crore by 2020-2030, the public and private partnership is necessary. 

Talking about the metro, Sitharaman said that a 657 km metro line has been set up , and in 2018-2019, a 300 km one has been approved. 

Space

The FM said that India has emerged as a major space power and that this is the right time to put it to commercial use. A public sector enterprise by the name New Space India Limited will be developed that will tap into the benefits of the research and development carried out by ISRO. 

New Space India Limited will also take care of the commercialization of space products.

Agriculture

The Finance Minister has assured that the government will support private entrepreneurs in agriculture, and will work on providing agricultural infrastructure to farmers. She has also proposed the innovative Zero Budget Farming technique to be implemented.

Additionally, there is also a scheme in the pipeline to employ about 75 thousand skilled entrepreneurs in the agro-rural industry sector. 

Aadhaar

Aadhaar and PAN card will be interchangeable, as proposed by the Finance Minister. This is for the ease and convenience of the taxpayers. Also, the returns tax return can be filed on the basis of Aadhaar, and PAN is not needed.

She has also proposed discarding the policy of NRIs waiting for 180 days to make Aadhaar. They can instead get it done immediately.

Startups/SMEs/Entrepreneurs

The FM has addressed the very much unwanted Angel Tax issue, wherein she has specified that startups won’t be under the scanner from the income tax department if startups provide them clear information about the fundings. 

Businesses with an annual turnover of Rs. 50 crore will have to offer their customers easy payment options. Also, there will be no charges and merchant discount rates will be imposed on customers and merchants as well.

The Finance Minister has also announced that there will be a TV program that will be exclusively for startups. 

Taxes

Businesses with an annual turnover Rs. 400 crore will now have to pay the lower tax rate of 25%, which was, up until now, only for the firms with an annual turnover of Rs. 250 crore. This covers almost 99.3% of the total companies.

Salaried people whose annual taxable income is above Rs. 5 lakh will have to pay taxes. Which means, if a salaries professional is earning Rs 8 lakh, then he needs to lay tax only on Rs 3 lakh. 

To discourage cash businesses, a TDS of 2% will be levied on cash withdrawal of amount more than Rs. 1 crore a year.

Taxpayers will now be able to obtain pre-filled tax returns, which will reduce the time required to file taxes and also help get better accuracy in tax filing. It will have details of income, bank interest, and more, gathered from banks stock exchanges, mutual funds.

The FM has also proposed to enhance surcharge on individual income of Rs 2-5 crore by 3%, and over Rs 5 crore by 7%. FM Nirmala Sitharaman has opinionated that people with high incomes should contribute to the development of the nation.

EV Push

To encourage people to buy more electrically powered vehicles, the government has requested to slash the GST rates on electric vehicles from 12 to 5%. 

Also, there will be a deduction on the income tax of Rs. 1.5 lakh on the interest paid on loans for buying EVs. 

Additionally, Rs. 2.5 lakh will be waived off for those who are seeking loans to buy EV spread over a loan period.

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