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INTERIM BUDGET

(2019-20)
 What kind of benefits this budget will offer to
different segments of the society?
 How much money an individual can save because of
this budget?
 Change in income tax at different income levels
What is Interim Budget ???
Interim Budget

 As per dictionary ‘Interim’ means Meanwhile.


 When an out going government doesn’t have
time to present the full budget because election
are approaching it present a proposed budget
later can be approved finally by the incoming
government.
 These budgets are common in democracies
where one political party or a coalition is voted
out and another political party or a coalition is
voted into office.
Difference between Interim Budget
and Annual Budget??
 Interim Budget is announced by the current government during
the last year of its tenure before election whereas Annual
Budget is announced by the new government after taking
charge.
 Annual budget is announced in two parts. Part one is detailed
structure of income and expenses prepared by govt in the
previous year and second part is the announcement of future
ways to raise funds from taxes and how will it spend on the
development them on development in the country in important
areas.
 Interim budget is applicable only till the new government takes
charge whereas annual budget is applicable for full financial
year.
Interim Budget 2019-20

 Interim Budget Was presented in parliament on


1st February by the union minister for Finance,
Corporate Affairs, Railway & Coal, Shri Piyush
Goyal, who is also a Charted Accountant(C.A.).
 The Span of interim budget is small i.e. till the
new government takes the charge.
Interim Budget Highlight
 For farmers and Rural India:
 New Scheme- namely “Pradhan Mantri Kisan Samman Nidhi ( PM-
KISAN )” to extend direct Income support at the rate of Rs. 6000 per
year in three equals instalments to farmer families, having cultivable
land up to 2 hectares is announced.
 12 Cr small and marginal farmer will be covered in this Scheme.
 The Scheme will be effective from December 1st 2018.
 Interest subvention for farm loan takers: Farmer affected by natural
calamities to get 2% interest subvention and additional 3% upon timely
repayment. So effective interest on KCC will be 2%.
 Kamdhenu Scheme for genetic up-gradation of cow husbandry.
 2% interest subvention for the farmers who are in the business of
animal husbandry and fisheries.
 India allocated 190 billion for construction of rural roads in FY 19/20
Income tax reliefs
income New tax Rate
Up to 5 lakh NIL ( previously 2.5 lakh )
5-10 Lakh 20.80%*
10-50 Lakh 31.20%*
50lakh -1 Cr 34.32%*$
1 Cr and above 35.88%#*

 Standard deduction raised Rs. 50000 from Rs. 40000.


 Direct tax collection at 12 Lakh Cr INR from 6.30 lakh Cr in 2014.
 The Income tax payer has increase 80% from 2014.
 the Numbers are Still too low 6.8 Cr out of 135 Cr population.
 TDS threshold for home rent increased from 1.8 lakh to 2.4 lakh
 TDS limit goes four folds from 10k to 40 k on FD.
 Tax scrutiny goes digital: refund in a day.
 No notional rental income up to two house.
 Full tax rebate up to income Rs 5 lakh. Tax saving is 13 k
per annum
 More than Rs. 23000 cr tax relief to 3 crore taxpayers.
 Individual with gross income up to 6.5 lakh INR., no need
to pay tax with saving in PF and some equities.
 Capital gain Tax Exemption under Section 54 to be
available up to 2 Cr and on up to 2 house.

 Note:-
 * 4% Educational Cess.
 $ 10% surcharge.
 # 15 % Surcharge
Defence and Railways Budget

 Defence Budget increase by 10 k Cr INR. and


reach on 3 lakh crore INR.
 Disbursed 35,000 crore rupees under OROP
Scheme in last few years.
 Rs. 64,587 cr allocated to Railways for FY20.
 Railways capex for FY 20 set at record RS 1.6
lakh Crore.
Education Sector

 National Education Mission allocation increased by about


to Rs. 38,572 Crore in BE 2019-20.
 25% additional seats i.e. around 2 Lakhs in educational
institutions to meet the reservation of 10%reservation for
poor. while maintaining existing reservation for SC/ST/OBC
 10% reservation for poor in educational institutions and
government jobs.
Expenditure
 Total expen0diture for FY 2019-20 is budgeted at Rs.
27.87 trillion.
 Capital Expenditure seen around Rs. 3.36 trillion in
central government sponsored schemes.
 Defence budget raised to beyond Rs. 3 trillion.
 Railway budget allocation is Rs. 645.87 billion.
 Allocation to India's Northeast region proposed to be
increase by 21% over previous fiscal years
Fiscal Deficit

 For FY 2019-20 government revised fiscal


deficit target at 3.4% of GDP from 3.1%.
 Government’s stated commitment earlier was to
bring down fiscal deficit to 3.1 till march 2020.
 Current account deficit at 2.5% of GDP.
For workers
 Rs. 3000 per year pension for unorganised sector workers.
 New Pradhan Mantri Shram yogi Yojna for unorganised
sector worker with income up to Rs. 15,000 Per month.
Beneficiaries will get Rs 3,000 per month pension with a
contribution of Rs. 100 per month after retirement.
Government allocated 500 Crore rupees for the Scheme.
 Around 10 cr worker will be benefited by the Scheme.
After age of 60.
 Gratuity limit increase for worker to Rs. 30 lakh.
 60,000 cr allocation for MGNREGA.
Why this year's budget is named as
surgical strike 2??
Real Estate
 The government proposed to hike the TDS exemption limit applicable
to payment of rent from Rs. 1,80,000 to Rs. 2,40,000 per year.
 With an aim to boost the real estate sector, it proposed to extend the
period of exemption from tax on notional rent on unsold inventories
from one year to two years. This period will be applicable from the
end of the year in which the project is completed.
 The government proposed to extend the benefits under Section
80(i)BA of the Income Tax Act by one year. That means all housing
projects registered under the Real Estate Regulatory Act by March 31,
2020 would come under its ambit. Under the government's affordable
housing scheme, projects with units up to a carpet area of 30 sq. m in
four metros, under certain conditions, benefit from a 100 per cent
profit deduction.
 Considering the difficulty of the middle class having to maintain
families at two locations on account of their job, children's education,
care of parents etc exempt levy of income tax on notional rent on a
second self-occupied house.
Tax Payers
 Standard deduction raised Rs. 50000 from Rs. 40000. This is
expected to result in a maximum tax saving of Rs. 3,588.
 Full tax rebate up to income Rs 5 lakh. Tax saving is 13 k per
annum.
 Direct tax collection at 12 Lakh Cr INR from 6.30 lakh Cr in
2014.
 The Income tax payer has increase 80% from 2014.
 the Numbers are Still too low 6.8 Cr out of 135 Cr population.
 TDS threshold for home rent increased from 1.8 lakh to 2.4 lakh
 TDS limit goes four folds from 10k to 40 k on FD.
INVESTORS
 Individuals and HUF’s earning long term capital gains of up to
Rs.2 cr on sale of residential house can now get exemption by
investing in up to two residential houses instead of one.
However, this is a once in a lifetime option.
 Threshold tax deducted at source on rent increased to Rs. 2.4L
from Rs. 1.8L.
 Threshold for TDS on interest income from banksand post-
office schemes increased to Rs. 40,000 from Rs. 10,000.
Businessmen

 100% tax holiday on profits and gains fro


development of affordable housing projects
extended to project approved till March 31,2020.
 GST- registered small and medium enterprises to
get 2% interest rebate on incremental loan of Rs. 1
Cr.
 Exemption on national rent taxation or unsold
inventory for builders and developers extended
from 1 yr. to 2 yr.

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