Last updated: February 1st, 2019 11:37 PM

Interim Budget 2019

An Interim Budget is announced during the year of the General Lok Sabha Elections and will be valid for the months leading up to the event. The recently introduced Budget is the sixth of the current governing regime. This article is a detailed account of the Interim Budget 2019.

Tax Exemption for Individuals

To start with, individual taxpayers are exempted from the ambit of income-tax payments if their annual income is within Rs 5 lakhs. This initiative is expected to provide a tax benefit to around three crore middle class-taxpayers. Moreover, individuals with an income of up to Rs 6.5 lakh need not pay any tax if they have their investments in Provident Funds and prescribed equities. Note: Notwithstanding these exemptions, taxpayers falling under this bracket are necessitated to file their income tax returns to get the entire benefit of the rebate.

Other Income Tax Benefits

Other prominent developments for taxpayers include:

1. Hike of Rs. 10,000 in standard tax deduction for salaried individuals, as the same has been increased to Rs. 50,000 per year from Rs. 40,000 per year.
2. Capital gains tax exemptions under Section 54 to be provided for up to Rs 2 crores for sellers of house property and reinventors of proceeds. Exemptions will be made available for two house properties.
3. A massive hike of Rs. 30,000 has been announced for the TDS threshold on bank interest and income from post office investments.
4. TDS Threshold on rental income has been increased to Rs 2.4 lakhs from Rs 1.8 lakhs, which effectively means that TDS provisions will not be applicable on house rent for up to Rs 2.4 lakhs per year.
5. TDS provisions are excluded for bank and post office interests for up to Rs 40,000. Previously, it was Rs 10,000.
6. Income tax returns will hereon be processed within 24 hours.
7. This one’s for the future – in a span of two years, all verification of taxpayers will be pursued electronically without any interface with the taxpayer. Meaning, all assessments and IT Return verifications will be done by an anonymized tax system without any intervention by officials.
8. No change in income-tax rates has been pronounced for the time being.

Pradhan Mantri Kisan Samman Nidhi

This farmer-centric scheme of the Interim Budget is set to cover at least 12 crore small farmers, costing the Government an exchequer of Rs 75,000 crore per year.  According to the scheme, a sum of Rs 6,000 per year would be granted to small farmers owning less than two hectares of land. The sum of money will be transferred to the bank accounts of these farmers in three equal instalments of Rs 2000 each.

Other Benefits for Farmers

1. Farmers affected by natural calamities will be granted an interest rate subvention of 2% and a 3% subvention for timely repayment of the loan amount. Interest subvention spares the loan borrower from the total interest liability of the loan amount.
2. A 2% interest subvention will be granted for farmers who are pursuing animal husbandry and fisheries activities.
3. The Kamdhenu scheme has been announced for animal husbandry activities.
4. The government will create a separate Ministry for Fisheries.
5. An increased outlay of Rs 750 crores has been allocated for the Rashtriya Gokul Mission.
6. Rashtriya Kamadhenu Ayog will be set up for the sustainable genetic up-gradation of Cow resources.

Benefits for Workers

1. A monthly pension of Rs 3,000 will be provided for the retired workers of the organized and unorganized sector under the Pradhan Mantri Shram Yogi Maandhan Scheme. The benefit is applicable for workers with an income of below Rs 15,000.
2. The eligibility cover limit for Employees State Insurance has been increased to Rs 21,000 per month from the previous allocation of Rs 15,000.
3. The Gratuity Limit has been increased to a sum of INR 30 lakhs from the previously affixed 10 lakhs.
4. The Employees Provident Fund Organization (EPFO) would render Rs 6 lakhs for women who suffer from grievous injuries.
5. The Government would contribute 14% to the New Pension Scheme. Its previous share was 10%.

Highest Ever Allocation for Railways

The Railway sector has been allocated with the highest the segment has received thus far – a sum of Rs 1.58 lakh crores. Along with this, the segment will receive capital support of Rs 64,587 crores. The target operation ratio for the next financial year has been set at 95%. As for commuters, no railway fare hike has been announced for the time being.

Extension of Section 80-IBA of Income Tax Act

Income tax relief on notional rent from unsold houses has now been extended to two years from one year and hence will apply until March 2020. Section 80-IBA of Income Tax Act states that if a taxpayer’s gross total income comprises of any profits and gains realized from the business of developing and building housing projects, a deduction of an amount that equals to 100% of the profits and gains derived from such business will be allowed.

The Health Sector

The following proposals have been laid out for the health sector:

1. A total outlay of Rs. 61,398 crores have been allocated for the health sector.
2. Ayushman Bharat Health and Wellness Centres will be set up under the National Urban Health Mission for providing comprehensive and quality health care.
3. A sum of Rs. 31, 745 crores have been allocated for the National Health Mission (NHM). The previous allocation was Rs 20,129 crores.
4. The establishment of twenty-two AIIMS has been planned for the State of Haryana.

The Entertainment Industry

1. All filmmakers will be provided with the access to single window clearance.
2. Anti-camcording provisions will be added to the Cinematograph Act to control piracy.

MGNREGA

The Mahatma Gandhi National Rural Employment Guarantee Act has received an allocation of Rs. 60,000 crores. As the name conveys, the initiative is an Indian labour law and social security measure that is aimed at guaranteeing the ‘right to work’.

Fiscal Programme

1. A target of 3% of fiscal deposit has been aimed for by 2020-21, as the current rate stands at an improved 3.4%.
2. Centrally Sponsored Schemes has been provided with an allocation of 3,27,629 crore in BE 2019-20.
3. A sum of Rs 38,572 has been allocated for the National Education Mission for BE 2019-20.
4. Integrated Child Development Scheme (ICDS) gets an allocation of Rs 27,584 crores in BE 2019-20.
5. The SC and ST community has been allocated with a budget of Rs 76,801 crores and 50,086 crores respectively for BE 2019-20.

Welfare Measures for the Poor and Backward Classes

1. 25% additional seats have been reserved for these communities to meet the reservation quota of 10%.
2. All willing households will be given electricity connections by March 2019.

Nomadic Tribes

To cater to the vulnerable sections, a new committee under NITI Ayog has been assigned with the task of identifying the most marginalized of Denotified, Nomadic, and Semi-Nomadic Tribes. A new Welfare Development Board will be set up for the development of such communities.

MSME and Traders

1. GST registered SMEs will be provided with a 2% interest subvention on an incremental loan of Rs. 1 crore.
2. Women-owned SMEs will contribute to at least 3% of the 25% sourcing for the government undertakings.
3. A renewed focus will be emphasized on Internal trade.

Digital Villages

Measures will be initiated to make India more digital by the next five years. For this purpose, around one lakh villages will be made digital.

Vision 2030

The Government has proposed to make India a modern, technology-driven, high growth, equitable and transparent society through the following targeted dimensions:

1. To build a robust physical and social infrastructure and to provide ease of cost of living.
2. To make India digital by digitizing government processes with the help of youth leaders.
3. To create a pollution-free environment in the country by leading the transport revolution with electric vehicles and by focusing on renewables.
4. To expand rural industrialization using modern digital technologies to increase the scope of employment.
5. To have clean rivers and safe-drinking water by efficient use of water through micro-irrigation.
6. To scale up the nation’s coastline and ocean waters to power India’s development and growth.
7. To make Gaganyan the launch-pad of satellites for the world and to place an Indian astronaut into space by 2022.
8. To make India self-sufficient in foods by producing foods in the most organic way and exporting the same to other countries.
9. To create a healthy India through the Ayushman Bharat initiative, with women holding equal rights and concern for their society and environment.
10. To transform India into a Minimum Government-Maximum Governance nation with pro-active and responsible bureaucracy.