Union Budget: No change in Income Tax slab rates but additional deductions on EVs and affordable housing
Income Tax changes in Union Budget LIVE: New in seat, Finance Minister Nirmala Sitharaman is all set to present first Budget of the NDA 2.0 government, on July 5, 2019 (today). The taxpayers would be glued to their seats to know about the changes government will bring in the Income Tax regime. The individual taxpayers are expecting to have tax relief to have more disposable or income to invest. Zee Business Online had also learnt that the government might increase the Section 80C limit from Rs 1.5 lakh to Rs 2 lakh. During the Interim Budget 2019-20, the government had increased the tax rebate to Rs 12,500 for taxpayers whose taxable income was up to Rs 5 lakh. However, there was no change brought in the basic exemption limit. While the middle-class salaried taxpayers who were ruled out of the previous exemption would expect the new FM to increase the basic exemption limit from Rs 2.5 lakh to Rs 3 lakh, to help the taxpayers who are not eligible for the Rs 12,500 tax rebate.
Watch Budget 2019 live here
Income Tax changes in Union Budget LIVE: New in seat, Finance Minister Nirmala Sitharaman is all set to present first Budget of the NDA 2.0 government, on July 5, 2019 (today). The taxpayers would be glued to their seats to know about the changes government will bring in the Income Tax regime. The individual taxpayers are expecting to have tax relief to have more disposable or income to invest. Zee Business Online had also learnt that the government might increase the Section 80C limit from Rs 1.5 lakh to Rs 2 lakh. During the Interim Budget 2019-20, the government had increased the tax rebate to Rs 12,500 for taxpayers whose taxable income was up to Rs 5 lakh. However, there was no change brought in the basic exemption limit. While the middle-class salaried taxpayers who were ruled out of the previous exemption would expect the new FM to increase the basic exemption limit from Rs 2.5 lakh to Rs 3 lakh, to help the taxpayers who are not eligible for the Rs 12,500 tax rebate.
Watch Budget 2019 live here
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Budget 2024 Costlier and Cheaper Items Live Updates: Pragmatic approach
"In this budget announcement, the government has taken a reflective and pragmatic approach, summarizing the achievements of the past decade rather than making bold announcements. This interim budget seems to be a strategic move, avoiding major actions before the upcoming election.
The emphasis on continuity and stability is evident, setting the stage for potential impactful measures in the post-election period. The extension of Ayushman Bharat cover to all Anganwadi and Asha workers, along with the consolidation of maternal and child healthcare schemes into a comprehensive initiative, demonstrates a commitment to inclusive healthcare. While it may be viewed as a status quo budget on the surface, it signifies a responsible and measured fiscal strategy, showcasing the government's dedication to maintaining a positive economic trajectory.
The anticipation of more detailed fiscal numbers and micro financial parameters will provide a clearer picture of the country's economic direction. Overall, the budget lays the foundation for future developments and affirms the government's confidence in the positive trajectory of the nation," said Avinash Deshmukh, COO, iThrive.
FM concludes her Budget 2019 speech in Parliament
"In the first 50 years after independence we emphasized on rights; marking 75 years we should place emphasis on our duty towards India without undermining our rights,'' FM said.
Budget 2019 speech: Direct Taxes on high income tax payers
A surcharge will be levied on individuals with taxable income of Rs 2 to 5 crore, and Rs 5 cr and above. The effective tax rate for these categories will increase by around 3 percentage points and 7 percentage points, respectively.
Budget 2019: Tarun Garg, Manager, DHS mentioned 10 key points from a direct tax perspective
1. Government to focus on ease of administration and collecting the taxes
2. The direct taxes have significantly increased over past couple of years by 78% INR 6.38 lakh crores to INR 11.37 lakhs crore between 2013-14 to 2018-19. The direct tax revenue has grown by double-digit
3. Corporate tax – Govt. to continue with a phased reduction in rate
4. On electric vehicles - aim to leap frog into a global hub of manufacturing electric vehicles inclusive solar storage batteries. GST Council to lower the GST rates from 12 to 5%
5. In order to make electric vehicles affordable to consumer, additional income tax deduction of INR 1.5 lakhs deduction on loans taken to purchase electric vehicles;
6. To encourage start-up growth in India, investors who file requisite declaration will not be subject to any scrutiny on valuation of share premium.
7. Additional deduction of INR 1.5 lakh available for interest on loans availed before 31 March 2020 in respect of affordable housing of upto INR 45 Lakhs
8. Pre-filling of income tax returns to be provided - reduce time taken to file tax returns, better reporting
9. E-assessments – central cell to be single point of contact, cases selected for scrutiny in a random manner, without disclosing the name and designation of the officer
10. Surcharge has been increased for highest income brackets - proposed to enhance surcharge in the income category of INR 2 cr. to INR 5 crore and INR 5 crore and above. Effective increase in surcharge would be 3% and 7% respectively.
Budget 2019 speech: Capital gains from sale of residential house for investment in start-ups
"The government has proposed to extend period of exemption of capital gains arising from sale of residential house for investment in start-ups to March 2021. This innovative measure will boost investments into start-ups in the country”, shares Megha Maan, Senior Associate Director, Research at Colliers International India.
Additional deduction of Rs 1,50,000 on housing loans
FM has also proposed an additional deduction of Rs 1,50,000 on interest on, loans borrowed under affordable housing until 2020.
Budget 2019 speech: Interchangeability of PAN and Aadhaar
As more than 120 crore Indians now have Aadhaar, Sitharaman proposes to make the two documents interchangeable so that Aadhaar can be used for verification with no requirement for PAN.
Budget speech 2019: Coroporate tax now upto Rs 400 crore turnover
25 percent corporate tax rate is applicable to companies with an annual turnover of up to Rs 250 crore has been extended to companies with a turnover of up to Rs 400 crore. Now only 0.7 per cent of companies will remain outside of this 25 per cent rate.
Budget speech 2019: Income tax deduction to buy electric vehicles
FM announced an additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to buy electric vehicles. This leads to a benefit of Rs 2.5 lakh crore over the tax period of the loan for the loan payer.
Startups and investors will not be subject to valuation of share premium
FM said, to resolve the issue of Angel Tax the startups and investors who file requisite declarations will not be bound to any kind of scrutiny in respect of valuation of share premium. A mechanism of e-verification will be put in place and with this, the funds raised by startups will not require any tax scrutiny.
Startups will not be scrutinized under tax norms for funding
Indian startups raising funding will not be scrutinized under Income tax norms, said FM.
Budget 2019 speech: Infrastructure investment by the govt.
100 lakh crore rupees to be invested in infrastructure sector over next five years, Expert Committee to be set up to recommend structure and flow of funds through development finance institutions: FM
Budget speech: Loan to women SHG member under MUDRA scheme
One woman in every SHG shall be made eligible for a loan of 1 lakh rupees under MUDRA scheme, said FM.
Budget 2019 speech: Overdraft facility for women SHG member with Jan Dhan account
FM Sitharaman said that an overdraft of 5000 rupees will be allowed for every verified woman SHG member having a Jan Dhan account.
Budget 2019: Replacement of multiple labour laws into four codes
Tarun Garg, Manager, DHS said, ''The replacement of multiple labour laws into four codes is expected to streamline the process of registration, standardize the filing of returns, provide uniformity in defnitons across labour codes, significantly easing the business and reduce disputes.''