UNION BUDGET ANALYSIS

HIGHLIGHTS

 Income up to Rs 5 lakh exempted from income tax

 Standard deduction raised to Rs 50,000 from Rs 40,000
 Direct tax proposals to provide Rs 23,000 cr relief to 3 crore taxpayers
 Persons with gross income up to Rs 6.50 lakh not required to pay any income tax if they make
investments in provident funds, specified savings and insurance.
 12 crore small, marginal farmers to be provided assured yearly income of Rs 6,000 under PM-
KISAN scheme
 TDS threshold raised to Rs 40,000 from Rs 10,000 on interest earned on bank/post office
deposits
 Tax exempted on notional rent on a second self-occupied house
 TDS threshold for deduction of tax on rent to be increased to Rs 2.40 lakh from Rs 1.80 lakh
 Tax benefits for affordable housing extended till March 31, 2020
 Tax exemption period on notional rent on unsold inventories extended to two years from one
year
 Allocated Rs 20,000 crore in 2018-19, Rs 75,000 crore for FY2019-20 for PM-KISAN scheme
 Interest subvention of 2% during disaster to be provided to farmers for the entire period of
reschedulement of loan
 2% interest subvention to farmers for animal husbandry and fisheries activities; additional 3% in
case of timely repayment
 Rs 3,000/month pension for 10 cr unorganised sector workers with contribution of Rs 100/55 per
month under PM Shram Yogi Maandhan scheme
 Fiscal deficit pegged at 3.4% of GDP for 2019-20; target of 3% of fiscal deficit to be achieved by
2020-21
 Current Account Deficit pegged at 2.5% of GDP for FY20
 Total expenditure to rise by 13 pc to Rs 27.84 lakh cr in FY20
 National Education Mission allocation increased by about 20% to Rs 38,572 cr
 Allocation for Integrated Child Development Scheme increased by over 18% to Rs 27,584 cr
 Disinvestment target of Rs 80,000 cr in 2018-19 likely to be met; Target for FY20 set at Rs 90,000
cr
 25% additional seats in educational institutions to meet the 10% reservation for the poor
 Defence budget to cross Rs 3,00,000 cr for the first time
 Allocation for North East increased by 21% to Rs 58,166 cr in FY20
 Railways to get capital support of Rs 64,587 cr in FY20
 Indian filmmakers to get access to single window clearance for ease of shooting films; regulatory
norms to rely more on self-declaration
 2% interest subsidy for MSMEs on an incremental loan of Rs 1 crore for GST-registered entities
 At least 3% of the 25% sourcing for the government undertakings to be from women-owned
SMEs
 One lakh villages to be transformed into digital ones in 5 years
 New portal to support national programme on Artificial Intelligence
 Reforms in stamp duty; amendments to ensure streamlined system for levy of stamp duties to be
imposed and collected at one place
 Rs 60,000 crore allocation for MGNREGA in 2019-20
 India poised to become USD 5 trillion economy in next 5 years; aspires to become USD 10 trillion
in the subsequent 8 years
Here, we’ll see all the new schemes launched by the government in Budget 2019-20.
1. Pradhanmantri Kisan Samman Nidhi Yojna:
 Government announced fixed yearly income for small and marginal farmers.
 This scheme will benefit about 12 crore farmers who have 2 Hectare land.
 Rupee 6000 per year direct cash transfer in their account.
 Cash transfer will be given in three equal installments of Rs 2000 each.
2. Rastriya Kamdhenu Aayog:
 This aayog will undertake the development work for Cow welfare.
3. Pradhanmantri Shramyogi Maan-dhan Yojna:
 Mega Pension Yojna. It is expected to be largest in World.
 For unorganised sector and organised workers who earns upto Rs. 15000 monthly income.
 A fixed pension amount of Rs 3000 per month will be giving after 60 years of age.
 They will have to pay minimum contribution of Rs 55 starting from age of 18.
 Minimum premium, means if 29 years old person enters into it, he will have to pay only Rs. 100 per
month.
4. Interest subvention scheme for Fishries:
 2% interest subvention
 3% extra interest subvention if all the installments paid on time.
 The committee would implement policies and schemes for welfare of cows.
 It aims to enhance the production and productivity cows.

Tax proposals
 Individual tax payers with taxable income of up to Rs 5 lakh will get full tax rebate from now on.
 Those earning Rs 6.5 lakh will not have to pay tax, if they invested in specified savings such as PF, PPF,
etc.
 However, the tax slabs will remain unchanged.
 This move will benefit around 3 crore middle class tax payers.
 For salaried persons, Standard Deduction is being raised from the current Rs 40,000 to Rs 50,000.
 The Tax Deducted at Source (TDS) on fixed deposits and postal deposits will be exempted for interest
earned up to Rs 40,000 from Rs 10,000 currently.
 The rent up to Rs 2.4 lakh will be exempted from TDS.
 The benefit of capital gains of up to Rs 2 crore will be increased to investment on two residential
houses. This benefit can be availed only once in a lifetime.
 The benefit of the section 80IBA of Income Tax Act will be extended for one more year for availing of
the affordable housing.
FINANCE SECTOR
The Budget 2019 has identified Financial Sector as key driver of the economy. Accordingly, Piyush Goyal
announced following initiatives:

FINANCIAL REFORMS:
• Around 34 crore Jan Dhan accounts were opened during 2014-18.
• The Budget speech also mentioned the government's big financial decision of demonetisation. The
move succeeded in eliminating the black money. Demonetisation and other moves were able to bring
back Rs 1,36,000 crores of cash to banks.
• More than one crore people filed income tax returns post demonetisation.

Fiscal Expenditure
• The Interim Budget pegs the Fiscal Deficit at 3.4 percent.
• Total expenditure rises from revised estimates Rs 24,57,235 crore in 2018-19 to Rs 27,84,200 crore in
2019-20, a rise of Rs 3,26,965 crore.
• Capital Expenditure for 2019-20 is estimated to be Rs 3,36,292 crore.
• Centrally Sponsored Schemes (CSS) are proposed were allocated with Rs 3,27,679 crore in 2019-20 as
against Rs 3,04,849 crore in 2018-19 revised estimates.
• Allocation for National Education Mission is being increased from Rs 32,334 crore in 2018-19 revised
estimates to Rs 38,572 crore in 2019-20.
• Allocation for Integrated Child Development Scheme (ICDS) is being increased from Rs 23,357 crore in
2018-19 revised estimates to Rs 27,584 crore in 2019-20.

Taxation Reforms

• The direct tax collection has been increased substantially. The number of returns filed have increased
from 3.79 crore to 6.85 crore, showing 80 percent growth in tax base since four years. In 2018-19, 99.54
percent of the income-tax returns were accepted as they were filed.
• From now on, all returns will be processed in 24 hours and refund will be initiated at the earliest.
• The entire process will be done in the back-end so that a tax payer need not interact with an official,
thus, reducing time.
• Cinema goers who were subjected to multiple taxes up to 50 percent are mostly paying much lower tax
at 12 percent now.
• Exemptions from GST for small businesses has been doubled from Rs 20 lakh to Rs 40 lakh.
• Businesses comprising over 90 percent of GST payers will be allowed to file quarterly return soon.
• The GST collection for January 2019 is estimated at Rs 1.03 lakh crore.