Key Highlights of Budget 2019

Tax Benefits

• For Salaried Individuals: - Standard deduction has increase from Rs. 40,000/- to Rs. 50,000/-.

• For Companies:– The tax rate for companies having turnover upto Rs. 250 Crore is reduced to 25% instead of 30% which covers almost 99% of the companies.

• For all Individual Taxpayers: - Keeping the Slab rates intact, Income Tax Rebate u/s 87A will be given of Rs. 12,500/- for tax payers having taxable annual income upto Rs. 5 Lakhs and therefore the individual will not be required to pay any income tax. As a result, even persons having gross income up to Rs. 6.50 lakhs may not be required to pay any income tax if they make investments in the specified sectors and claim deductions for the same. So we can say, the rebate will not be applicable on those whose taxable annual income is above Rs. 5 lakhs.

• Presumptive tax u/s 44 ada: – The threshold limit for presumptive taxation of small businesses was raised to 2 Crore from 1 Crore and for small professionals it was fixed at Rs. 50 lakhs. Also the presumptive profit rate was reduced to 6% from 8% to promote digital transactions instead of cash transactions.

• Exemption of Income:-Tax on Notional Rent on a Second Self-Occupied House giving relief to the families or taxpayers who have to maintain houses at 2 different locations.

• Ceiling Limit of TDS u/s 194A i.e. Interest on Fixed Deposits in bank and various Post Office Deposit Schemes increased from Rs. 10,000/- to Rs. 40,000/-

• Ceiling Limit of TDS u/s 194I i.e. rental income increased from Rs. 1,80,000/- to Rs. 2,40,000/-

• Capital Gains Benefit has been increased u/s 54 from investing in one residential house to investing in two residential houses.

• Section – 80-IBA i.e. Deductions in respect of profits and gains from housing projects: - One more year extension given for approval of housing projects. Previously it was till March, 2019 now it is till March, 2020.

Ease of Doing Business

• It is proposed that the Tax Assessment will be done electronically in the next 2 years.

• IT Returns wherever refund applicable will be processed within 24hrs of filing.

• Custom Duty has been removed from 36 Capital Goods.

• Government recommended GST council to reduce GST rates for home buyers at the earliest

• Benefit given to unsold inventory has increased from one year to two years, from the end of the year in which the project is completed.

• 2% interest relief for MSME GST registered person on Additional Loan of Rs.1 Crore was proposed.

Benefits to Middle class and Farmers

• Rs. 60,000 crores are being allocated for MGNREGA in BE 2019-20, for ensuring food for all.

• Announcement of opening of 22nd AIIMS in Haryana was made in the budget.

• PM Kisan Yojana which will be applicable from 1st December, 2018 proposes Rs. 6000 per annum for every farmer having upto 2 hectares land. Amount will be transferred in 3 instalments and first instalment for the period upto 31st March 2019 would be paid during this year itself.

• Proposals for 2% interest subvention for farmers pursuing animal husbandry and also create separate department for fisheries was made.

• Also proposal for 2% interest subvention for farmers affected by natural calamities and additional 3% interest subvention for timely payment was made.

• Tax free Gratuity limit increased from 10 Lakhs to 20 Lakhs.

• Amendment to Payment of Bonus Act was made, by which now Bonus will be applicable for workers earning Rs. 21,000/- pm instead of Rs. 10,000/- pm.

• Amendment to Maternity Benefit (Amendment) Act, 2017 for empowering the women by which 26 weeks of Maternity Leaves will be given to pregnant women instead of 12 weeks.

• Defense Budget was proposed to be more than 3 Lakhs crores for the first time.

• The New Pension Scheme (NPS) was been liberalized. Contribution made by the Government was increased to 14% from 10%.