The Interim Finance Minister Piyush Goyal presented the Interim Union Budget 2019-20 as Finance Minister Arun Jaitley was sidelined with an illness. The Interim Union Budget was presented a few minutes after 11AM and Piyush Goyal made his budget speech in a mixture of Hindi and English.
Let’s take a look at how Interim Union Budget 2019-20 helps farmers, pensioners, laborers and the middle class.
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The Union Budget has announced a new scheme for farmers called Pradhan Mantri Kisan Samman Nidhi. There would be a direct cash transfer of Rs 6,000 a year, directly to the bank accounts of small and marginal farmers owning less than 2 hectares of land. This would be in three installments of Rs 2,000 each. More than 12 Crore farmers and their families would benefit, costing the Government a whopping Rs 75,000 Crores.
The Government wants to double farmer’s income and has proposed to increase MSP (Minimum Support Price) to 1.5 times.
See Also: How To Calculate Agriculture Income Tax?
The Government has introduced a Mega Pension Yojana called Pradhan Mantri Shram Yogi Mandhan. This is an assured monthly pension of Rs 3,000 a month for workers in the unorganized sector above 60 years of age. This requires a nominal contribution of just Rs 100 a month. Crores of workers in the unorganized sector like drivers, plumbers, barbers and housemaids would benefit from this scheme, which could be the World’s largest pension scheme in the next 5 years. Pradhan Mantri Shram Yogi Mandhan could benefit 10 Crore workers in the unorganized sector.
The MNREGA (Mahatma Gandhi National Rural Employment Allocation) has been hiked by 9% from Rs 55,000 Crores to Rs 60,000 Crores. This should boost jobs in India. EPFO membership has increased by 2 Crores in the last two years. There’s a hike in tax free gratuity to Rs 30 Lakhs for employees having employment service of more than 5 years. A separate Department of Fisheries could promote the livelihood of 1.45 Crore people dependent on fishing. There’s the Rashtriya Kamdhenu Aayog to enhance productivity of cows.
The Government has announced a 2% interest subvention for MSMEs on loans up to Rs 1 Crore. MSMEs provide jobs to Crores of people. This is a welcome move after the recent Rs 1 Crore Loan within 59 minutes.
Buyers and Sellers of real estate have a reason to smile. Previously, a person who owned two houses had to pay a tax on the notional rent even if the second house was not rented out. If the second house was occupied by parents/siblings, tax on notional rent would be paid even though no income was earned from the house. The notional rent has been waived off.
The threshold limit for TDS on rental income has been increased from Rs 1.8 Lakhs to Rs 2.4 Lakhs. Previously, if a person purchased a residential property by selling another residential property, the proceeds from the sale of the residential property would be exempt from capital gains tax. This was applicable for a single new residential property under Section 54. The Budget has proposed to provide the benefit of rolling over capital gains if the investment is made in not just one, but two residential houses.
The salaried middle class has reason to smile. There’s a full tax rebate for income up to Rs 5 Lakh. Individuals with gross income up to Rs 6.5 lakhs do not need to pay tax if they have investments in provident funds and prescribed equities which are tax saving schemes. The standard deduction has been hiked to Rs 50,000.
The income tax rebate has been hiked from Rs 2,500 to Rs 12,500. This proposed tax rebate is admissible to taxpayers having total income up to Rs 5 Lakh instead of the current Rs 3.5 Lakh. Those with income up to Rs 5 lakhs pay no tax. The rates remain the same for others.
If a salaried person fully utilizes Section 80C benefit, he won’t have to pay income tax up to 7 Lakhs. The salary income would be reduced to Rs 5 Lakh after the Section 80C deduction, coupled with the standard deduction of Rs 50,000. In addition the TDS threshold on interest earned on bank FD has been raised to Rs 40,000 from the earlier Rs 10,000.
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