The Budget of FY 2019-20 is an interim budget since it is the last budget before the general elections to be held later on this year. Naturally, many populist schemes were expected to be announced in the interim budget. So what are the highlights of 2019-20 Budget, let us find out.
Personal Income Tax rates kept unchanged at the following:
- NIL tax on income upto Rs 2.5 lacs
- 5% tax on income above Rs 2.5 lacs upto Rs 5 lacs
- 20% tax on income above Rs 5 lacs upto Rs 10 lacs
- 30% tax on income above Rs 10 lacs
However, full tax rebate under Section 87A provided to individuals earning income upto Rs 5 lacs. The limit of tax rebate has been increased from Rs 2,500 to Rs 12,500. This implies that individuals earning income upto Rs 5 lacs will not need to pay any tax. This move will benefit an estimated 3 crore middle class tax payers and it will result in a revenue loss of Rs 18,500 crores to the government.
- Taxable income above Rs 50 lacs: Surcharge of 10%
- Taxable income above Rs 1 crore: Surcharge of 15%
- Health and Education cess on Income Tax: 4%
- Standard tax deduction for salaried persons raised from Rs 40,000 to Rs 50,000
Income Support to Farmers
An income support scheme for marginal farmers was announced in the interim Budget 2019-20 called Pradhan Mantri - Kisan Samman Nidhi (PM - KISAN).
Under this scheme, farmers holding upto 2 hectares of agricultural land will get Rs 6,000 as assured income support every year.
This adds upto Rs 16.40 per day income support for marginal farmers. Out of 14.57 crore agricultural holdings in the country, about 12.56 crores are less than 2 hectares whom this scheme is intended to benefit.
However, the amount of Rs 6,000 will not be transferred in the beneficiaries account in one go rather it will be paid in 3 instalments of Rs 2,000 each.
Social Security for Unorganised Sector
A social security pension scheme for workers in the unorganised sector was announced called the Pradhan Mantri Shram Yogi Mandhan.
Under the scheme, an assured monthly pension of Rs 3,000 per month will be provided to workers in the unorganised sector after 60 years of age. However, to avail of the scheme, workers will have to contribute Rs 100 month.
An allocation of only Rs 500 crores has been made for this scheme in the interim budget for FY 2019-20.
Other Highlights of Budget 2019-20
- Upper ceiling on gratuity payment increased from Rs 20 lacs to Rs 30 lacs
- TDS on Bank/Post Office Deposits increased from Rs 10,000 to Rs 40,000
- TDS threshold on rental income raised from Rs 1.8 lacs to Rs 2.4 lacs
- Fiscal deficit in 2018-19 was 3.4% of GDP which was marginally higher than than the budgeted target of 3.3%. A fiscal deficit target of 3.4% has been fixed for FY 2019-20
- A disinvestment target of Rs 90,000 crores from PSUs for 2019-20 has been fixed
- Direct tax collections for FY 2018-19 are expected to exceed the target of Rs 12 lac crores by Rs 50,000 crores
- GST collections have fallen short of the budget target by Rs 1 lac crore for 2018-19