Consumption to GDP ratio in India is extremely low and taxes had slowed down consumption. The tax moves announced today will be significant in reviving consumption, says HDFC’s Deepak Parekh.Income Tax: Key highlights from FM Piyush Goyal’s speech
-Individual taxpayers with annual income up to Rs 5 lakh to get full tax rebate.
-Standard tax deduction for salaried persons raised from Rs 40,000 to Rs 50,000.
-TDS threshold on interest on bank and post office deposits raised from Rs 10,000 to Rs 40,000.
-Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to Rs 2 crore; can be exercised once in a lifetime.
-Benefits under Sec 80(i)BA being extended for one more year, for all housing projects approved till end of 2019-2020
Now comes the big announcement and in a major boost to the small taxpayer, the government said it will increase the exemption limit for income tax paid by individuals from the current Rs 2.5 lakh to Rs 5 lakh. The government raises standard deduction for salaried revised to Rs 50,000 from Rs 40,000.
Individuals with gross income up to Rs 6.5 lakh will not need to pay any tax if they make investments in provident funds and prescribed equities.
This translates to a benefit of Rs 18,500 crore to more than 3 crore taxpayers.
This comes as a relief for salaried class as government hikes exemption limit for income tax.
Standard deduction has been raised to Rs 50,000 from Rs 40,000. The government also increased the gratuity limit from Rs 10 lakh to Rs 30 lakh. Any person who completes 5 years in an organisation is eligible for gratuity.
That puts Rs 12,500 per annum in people’s pockets-more than Rs 1,000 per month, more than double what the farm package gives to small and marginal farmers.
FM Piyush Goyal said that his government is committed to eliminating the ills of black money and the government’s anti-blackmoney measures have brought undisclosed income of about Rs 1.30 lakh crore to the surface. As many as 3.38 lakh shell companies deregistered, he added. There has been an 18 percent increase in direct tax collections in 2017-18, 1.06 crore people included in tax base; more than 1 crore citizens filed IT returns for the first time, after demonetization, Goyal said in his budget 2019 speech in Lok Sabha.
Meanwhile, the BSE Sensex advanced 200 points to 36,457.08, and the Nifty rose 54.50 points to 10,885.45. The Nifty Midcap and Smallcap were up 0.6%. Among the sectors, auto, realty, FMCG gained 1.5 percent to 2.6 percent. The metal fell over 3%, followed by the oil sector.
FM Shri Piyush Goyal said: “GST has been continuously reduced, resulting in relief of Rs 80,000 crore to consumers; most items of daily use for poor and middle class are now in the 0%-5% tax bracket.” Group of Ministers examining how prospective house buyers can benefit under GST, he added. GST collections in January 2019 has crossed Rs 1 lakh crore, he said.
Interim Finance Minister Piyush Goyal on Friday made key announcements on the economy, farmer relief packages, among others, while presenting the last and the final Budget of the Modi government ahead of the Lok Sabha elections. Here’s a list of the key announcements made in the Election Budget.
As expected, interim finance minister Piyush Goyal on Friday announced a massive farm relief package in the interim budget. The Rs 75,000-crore PM Kisan Samman Nidhi Programme will provide Rs 6,000 to farmers owning lander under 2 hectares. The scheme will have the Rs 6,000 transferred directly to farmers’ accounts in three installments, Goyals said, adding that the entire cost of Rs 75,000 crore for FY20 will be borne by the central government.
Digital India: Here are the key highlights from FM’s budget speech on the sector
-India is leading the world in Mobile data consumption.
-Monthly mobile data up 5x in last 45 years.
-Cost of data & voice lowest in the world.
-Number of mobile & mobile handset manufacturers increased from 2 to 268.
-Make in India by mobile manufacturers increased jobs.
-3 lakh common centers service employ over 12 lakh people.
-Common service centers providing connectivity to villages to make digital villages.
-Propose to set up 1 lakh digital villages in 5 years time.
-Jandhan aadhar mobile & direct benefit transfer has been game changers.
-Aadhar is now universally implemented directly in bank removing middle men.
FM Piyush Goyal on the defence sector said: “We had promised to implement One Rank One Pension. We have already disbursed over Rs 35,000 crore after implementing the scheme in true spirit. Goyal allocates Rs 3 lakh crore for the defence sector for FY20. If necessary, additional funds will be provided for safety and security of our army personnel, he said.