Modi govt boosts Middle Class, Farmers, Workers' Josh!

Transcription

1 Mission Elections 2k19 Modi govt boosts Middle Class, Farmers, Workers' Josh! b Hive Volume 06 ** February 2019 ** Issue 02

2 # Contents Humaare sarkar ki niyat saaf hai neeti, spasht hai aur nishtha atal hai Union Finance Minister Piyush Goyal in the absence of Shri Arun Jaitley presented the Interim Budget 2019 in Parliament on Friday. The budget, the last before the country votes for a new Lok Sabha in April-May, also broke the convention of not announcing major income tax changes when governments are in transition. He provided tax sops to the middle class, announced an annual income support for small farmers and contributory pension for labourers. He presented a stirring account of the Modi government s economic and reform policies, generously peppering his 100-minute speech with details of signature initiatives such as Ayushman Bharat, Pradhan Mantri Jan Ausadhi Yojana, Make in India, Jan Dhan Scheme, Start-Up India, MUDRA and the Insolvency and Bankruptcy Code (IBC). Introduction Snapshot Sector-wise analysis Direct Tax Proposals Financial statements & allocations Did You Know? The first Budget of independent India was only for seven and a half months and that was the time when the 'Interim Budget, that meant budget for short period, came into being.

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4 Snapshot o Increased spending on the animal husbandry and fisheries sectors o interest subvention plan for small-and-mediumsized businesses o massive spending plan for the country s farmers o Farmers to receive Income support on annual basis o Tax Rebate for salaried employees o Increase in standard deduction o allow investments from capital gains for buying two residential houses, o Waiver of tax on the notional rent payable on a second selfoccupied house Two major initiatives - a farmer income support plan and a pension plan. Although the farmers plan was expected, the pension announcement was not. And both could go some way to boosting Modi s popularity o pension program for India s informal sector workers o India s defence spending is less than it was last year because of depreciation o labourers who toil on farms but don t actually own any land will not benefit from the government s big spending plan for farmers Regardless of whether the government implements any of this with the election due by May, the announcements could still hurt opposition parties as they head out on the campaign trail with only manifesto promises to offer voters. 04

5 Agriculture and Farmers The PM-Kisan scheme will support 120 million small and marginal farmers and cost 75,000 crore PM-Kisan scheme Farmers owning up to 2hectare of land are promised with a direct support of 6000 per annum Doubling the interest subsidy on crop loans, and All farmers affected by natural disasters to get 2% interest subvention upfront for entire loan period Railways Steep hike in staff expenses from 77,796 crore to 86, crore Indian Railways has witnessed a huge jump in capital expenditure from 0.96 trillion [ ] to 1.48 trillion Housing and Urban Affairs The ministry has allocated 17, crore for executing metro projects across the country DMRC has been given grants of crore as against 50 crore in PMAY has been given 6, crore as against 6,505 crore in Union Budget The Deen Dayal Antyodaya Yojana-National Urban Livelihoods Mission [DAY-NULM] scheme has been given 500 crore in the Interim Budget as against 310 crore in the Union Budget. Atal Mission for Rejuvenation and Urban Transformation [AMRUT] scheme, which aimed at ensuring robust sewage networks, water supply and other infrastructures to improve the quality of life of people in urban areas, was given 7,300 crore, which was 6,000 crore in the current fiscal. 05

6 Rural Employement Govt has boosted allocation for the rural employment guarantee programme by 5000 crores to 60,000 crores The rural employment guarantee scheme seeks to provide 100 days of unskilled employment a year Healthcare PMAJY aims to cover over 10 crore poor and vulnerable families India s spending on health continues to be very low with 1.4% of the GDP Artificial Intelligence A National Programme for Artificial Intelligence covering 9 areas to be promoted. Aadhaar key to financial inclusion Will set up 1 lakh digital villages in next 5 years Workers Gratuity cap doubled to 20 lakh Government to contribute equally in pension accounts under mega pension scheme. To contribute 14% under New Pension Scheme Unorganised labour to get 3,000 per month after age of 60 under mega pension scheme for people with income up to 15,000 per month 06 Single window clearance - to Indian film makers

7 Salaried Individuals Section Particulars Wef. 16(ia) Standard Deduction for Salaried employees up to Rs.50,000/- from salary. No documents required. #Benefit : Save Tax on Rs.10,000/- based on the Slab Rate i.e. 5% or 20% or 30% ##No Change in Tax Rates. Slabs given below Individual Assesse <60years Taxable income Tax Up to Rs.2.5L Nil Rs.2.5L to Rs.5L 5% Rs.5L to Rs.10L 20% Above Rs.10L 30% Resident Senior Citizen >60yrs Taxable income Tax Up to Rs.3L Nil Rs.3L to Rs.5L 5% Rs.5L to Rs.10L 20% Above Rs.10L 30% Resident Senior Citizen >80yrs Taxable income Tax Up to Rs.5L Nil Rs.5L to Rs.10L 20% Above Rs.10L 30% Surcharge: 10% of tax - total income exceeds Rs.50 lakh 15% of tax - total income exceeds Rs.1 crore Education Cess 4% Section Particulars Wef. 87A o Tax Rebate has been increased to Rs.12,500/- from Existing 2,500/- o Threshold Limit for Rebate increased from 3.5Laks to 5Laks Particulars Pre Budget Post Budget Difference Salary 550, ,000 Less: Std. Deduction (40,000) (50,000) (10,000) Net Amount 5,10,000 5,00,000 10,000 Tax Payable Income Tax 14,500 NIL 14,500 Mr.Pavan Resident Individual with Salary of Rs.550,000/- Particulars Pre Budget Post Budget Difference Mr.Suhas Resident Individual with Salary of Rs.650,000/- Salary 650, ,000 Less: Std. Deduction (40,000) (50,000) (10,000) Net Amount 6,10,000 6,00,000 10,000 Tax Payable Income Tax 34,500 32,500 2,000 Benefit to the Salaried middle class having Taxable Income upto 5Lakhs Taxable Income Tax Liability Pre-Budget Post-Budget 2,50, ,50,000 2,500-4,50,000 10,000-5,00,000 12,500-7,50,000 62,500 62,500 10,50,000 1,27,500 1,27,500 07

8 House Property Section Particulars Wef Individuals & HUF: Two House properties can be claimed as Self Occupied and No Deemed rental income on the on the 2nd self occupied property. Business [Real Estate] Notional rent in respect of unsold inventory shall not be charged to tax up to two years, instead of existing one year, from the end of the financial year in which the certificate of completion is obtained from the competent authority Capital Gains Section Particulars Wef. 54 o Exemption Limit of Investment in number of houses for Capital Gains increased from one house to two houses, if the Capital Gain is less than Rs.2 Crore. o This Exemption can be claimed only once in lifetime. Real Estate Section 80-IBA Particulars Time limit for getting approval of Housing projects for claiming deductions out of profits form housing projects extended up to 31st March 2020 TDS Provisions Section Particulars Wef. 194A Threshold limit for TDS on Interest on deposits paid by Banks or post offices has been raised from Rs.10,000 to Rs.40,000 Payer Threshold Limit if payee is Senior Citizen Others 194I Bank/Co-operative Society/Post office Rs.50,000 Rs.40,000 In any other case Rs.5,000 Rs.5,000 Threshold limit for TDS on Rent has been raised from Rs.180,000 to Rs.240, ITR s proposed to be processed electronically with in 24Hours. Proposed to issue Notifications to ease out the e-assessment proceedings without personal appearance to avoid corruption.

9 TDS Rate Chart Section Nature of Payment TDS Exemption Limit F.Y B Income from Salary Senior Citizen (above 60 Years) Super Senior Citizen (above 80 Years) Rs.3,00,000 Rs.5,00,000 Average rate of Tax + Education Cess + Surcharge if applicable shall be deducted on monthly basis Other Individual Rs.2,50, A Accumulated balance of provident fund [Premature Withdrawal] Rs.50,000 10% 194A Interest other than Interest on securities Limit for Senior Citizen Rs.50,000/- Limit for Others Rs.40,000/- 10% 194C Payment to Contractors; Subcontractor, Advertising Contractors (including other transporters) Rs.30,000 per contract (or) Rs.1,00,000 p.a Ind/Huf 1% Others 2% 194H Commission / Brokerage Rs.15,000 p.a 5% 194-I Rent on Plant / Machinery Rs.2,40,000 p.a 2% 194-I Land or building or furniture or fitting Rs.2,40,000 p.a 10% 194-IA Payment on transfer of nonagricultural immovable property Rs.50,00,000 & above 1% 194J 194J Fees for Professional / technical Services Fees for operation of call centre services Rs.30,000 p.a 10% Rs.30,000 p.a 2% 194-IB Rent paid by any Indl/HUF(Other than those covered under Sec 194I) to any Resident Rs.50,000 per month/for part of the month 5% 194-IC Any person making payment to land owner under a Joint Development Agreement (JDA) No Limit 10% 206C [1F] TCS on Sale of Motor Vehicle Rs. 10,00,000 per transaction 1% 09

10 Financial Statements Particulars (Figures in Crores) (Actuals) (Budget Estimates) (Revised Estimates) (Budget Estimates) REVENUE Revenue Receipts 14,35,233 17,25,738 17,29,682 19,77,693 Capital Receipts 7,06,742 7,16,475 7,27,553 8,06,507 Sub-Total 21,41,975 24,42,213 24,57,235 27,84,200 DEFICIT Revenue Deficit 4,43,602 4,16,034 4,10,930 4,70,214 Fiscal Deficit 5,91,064 6,24,276 6,34,398 7,03,999 Primary Deficit 62,112 48,481 48,481 38,938 Rupee Comes From Rupee Goes To