Modi government today unveiled an interim budget with mega announcements for middle class, rural citizens, farmers and unorganised sector workers. Keeping any eye on the Lok Sabha polls, government made a slew of announcements to keep everybody happy with tax sops for salaried class, direct income for farmers and other social sector schemes.
The much anticipated interim budget 2019 — Prime Minister Narendra Modi’s last of this term — is finally out. Presented on Friday in the parliament by finance minister Piyush Goyal, Budget 2019 offers many sops for middle classes and farmers. Here are the 10 most important takeaways from budget 2019.
The tax benefit of Rs 40,000 in the form of standard deduction was introduced in last year’s budget in lieu of transport allowance and medical reimbursement being discontinued. This figure has been hiked in the latest budget 2019 to Rs 50,000, which comes as a relief for the salaried class.
A major announcement in this year’s budget is for individuals earning a taxable income of Rs 5 lakh, who will now be exempt from paying income tax in the financial year 2019-2020. Though this move brings succour for many, the budget does not have much up for grabs for those whose taxable income is above Rs 5 lakh. Combined with several other deductions such as tax free investments, standard deduction, interest on home loan repayment, NPS installment, mediclaim insurance premiums, and other allowances, this means that those with gross earning of up to Rs 10-11 lakh per year may potentially gain from this move if they are eligible to claim all benefits.
Again targeting the middle classes, the exemption limit for tax deducted at source (TDS) in case of bank interest and post office savings has been raised in budget 2019 to Rs 40,000 from the current Rs 10,000.
Pradhan Mantri Kisan Samman Nidhi was announced by Mr Piyush Goyal under which those farmers who own land less than two hectares will get Rs 6,000 per annum in their bank accounts by means of direct benefit transfer. This scheme will be fully funded by the central government and is expected to benefit about 12 crore small and marginal farmers. It will come into effect retrospectively from 1 December 2018.
Budget 2019 has also rolled out a mega pension scheme called Pradhan Mantri Shram Yogi Mandhan Yojana, targeted to benefit those working in unorganised sector with income of up to Rs 15,000 per month. The scheme aims to provide a monthly pension of Rs 3,000 to unorganised sector workers such as vendors, rickshaw pullers, construction workers etc after they reach 60 years of age.
Another benefit for the farmers from budget 2019 is the proposal to offer interest subsidy on loans. All farmers affected by a natural disaster will get an interest subvention of upto 2%, and adding to that a 3% interest subvention will also be given for timely loan repayment to the farmers.
There have been considerable announcements for the real estate sector especially affordable housing. Earlier, the notional rent on unsold inventories was exempt from tax for a period of 1 year. This time limit has been increased to 2 years after completion of the project. This is expected to give a boost to the real estate sector.
Bringing good news for property owners, the benefit of self occupied houses have been increased to 2 if those are vacant. In other words, apart from the house one lives in, if one has two other unoccupied houses then both those will be considered “self occupied” and no notional rent will be charged for both of them, Piyush Goyal announced.
Earlier, home owners could save capital gain tax upto Rs 2 crore if they invested the proceeds from sold property into another property. But earlier the condition was that the investment done should be limited to one property. In budget 2019, this has been raised to 2 properties with a roll-over mechanism.