The Modi government proposed various tax sops including
NEW DELHI (IANS) In a bonanza for the country’s middle class in an election year, the government on Friday proposed various tax sops including
Presenting the Interim Budget 2019-20, acting Finance Minister Piyush Goyal proposed doubling the tax exemption threshold for individual annual incomes from the current Rs 2.5 lakh to Rs 5 lakh. Individuals with yearly income within the proposed limit will not have to pay any income tax for the next fiscal.
He also proposed increasing the standard deduction limit by Rs 10,000, and raising the tax deducted at source (TDS) threshold on interest earned on bank and post office deposits which would benefit small depositors.
Besides proposing that standard deduction will be increased to Rs.50,000 from the current Rs.40,000 to benefit the salaried class, Goyal said individuals with annual incomes of Rs.6.5 lakh and who have invested in various tax savings schemes will not have to pay income tax.
According to the Minister, with additional deductions such as interest on home loans, national pension scheme contribution, medical expenditure on senior citizens, individuals with even higher income will not have to pay tax.
“This will provide tax benefit of 18,500 crore to over 3 crore middle class tax payers comprising self-employed, pensioners and senior citizens,” he said.
The ceiling on payment of gratuity has been enhanced from Rs 10 lakh to Rs 20 lakh.
The increase in standard deduction for the salaried segment will provide an additional tax benefit of Rs 4,700 crore fo over three crore salary earners and pensioners, Goyal said.
Moving to other sops, he said the benefit of rollover of capital gains under the Income Tax Act will be increased from investment in one residential house to two residential houses for a tax payer having capital gains up to Rs 2 crore. This benefit can be availed once in a life time.
Noting that income tax on notional rent is currently payable if one has more than one self-occupied house, Goyal said that to give a boost to the real estate sector, he is proposing to exempt levy of tax on notional rent on a second self-occupied house.
He also proposed to raise the TDS threshold on interest earned on bank and post office deposits from Rs 10,000 to Rs 40,000.
“This will benefit small depositors and non-working spouses. Further, the TDS threshold for deduction of tax on rent is proposed to be increased from Rs 1,80,000 to Rs 2,40,000 for providing relief to small taxpayers,” Goyal said.
Goyal Offers Income Support Scheme to Farmers
Addressing the distress in the agrarian sector, Finance Minister Piyush Goyal on Friday announced a scheme to provide direct income support of Rs 6,000 to farmers with a land holding up to two hectares, which would benefit about 12 crore people.
He also announced expansion of the interest subvention for loans taken under Kisan Credit Card to farmers involved in animal husbandry and fishing.
Presenting the Interim Budget for 2019-20 in the Lok Sabha, he said the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) will be effective from December 1, 2018.
“Under this scheme, direct income support of Rs 6,000 every year will be given to farmers who have a land holding of up to two hectares,” he said.
“This income support will be transferred directly into the bank accounts of the farmers in three equal instalments of Rs 2,000 each.” The scheme will be funded 100 per cent by the central government, he added.
Goyal said farm returns have reduced due to the declining prices of agriculture commodities in the international markets and a fall in food inflation in India in the last two years relative to the non-food sector.
“Small and fragmented land holdings on account of repeated division has also contributed in the decline in the income of the farmer families. Hence, there is need to provide structured income support to poor farmer families in the country for procuring inputs such as seeds, fertilisers, equipment, labour and to meet other needs,” he said.
Goyal said the scheme will be effective from December 2018 and the first instalment for the period up to March 31 this year will be disbursed soon.
The government will incur an annual expenditure of Rs 75,000 crore in 2019-20 while it has allocated Rs 20,000 crore in the revised estimates of the current year.
He also reiterated the government’s “historic” decision to provide Minimum Support Price (MSP) for 22 crops with 50 per cent profit over the input cost in order to double farm income. Agriculture continues to be the main driver of the rural economy, he said.
Saying an increase in farm loans to Rs 11.68 lakh crore in 2018-19, the minister said the allocation for interest subvention on farm loans has been doubled in order to provide farmers with affordable loans.
Moreover, the benefit of two per cent interest subvention will be provided to the farmers pursuing activities of animal husbandry and fishery who avail of a loan through the Kisan Credit Card (KCC), the minister said.
“Further, in case of timely repayment of loan, they will get three per cent additional interest subvention,” he said.
He also said that the government has decided to provide benefit of three per cent interest subvention for disaster affected farmers for the entire period of reschedulement — from the earlier period of one year– besides interest subvention of 2 per cent.
Goyal said Rs 1.7 lakh crore has been allocated in order to bring food at affordable rates to families belonging to the poor and middle class.
“We ensured that everyone gets food and nobody goes to sleep without food,” he said.
The Mahatma Gandhi National Rural Employment Guarantee Scheme has been provided Rs 60,000 crore in 2019-20 and more funds will be poured in if required, he said.
Saying the government seeks to break the urban-rural divide in the country, Rs 19,000 crore has been allocated to the Pradhan Mantri Gram Sadak Yojana as against Rs 15,500 crore in the previous budget, Goyal said.
Out of the total 17.84 lakh habitations in the country, 15.80 lakh were provided with pucca roads and the remaining work will be done soon, he said.
Goyal also announced a ‘Rashtriya Kamdhenu Aayog’ to upscale sustainable genetic upgradation of cow resources and to enhance production and productivity of cows.
“The Aayog will look after effective implementation of laws and welfare schemes for cows. The government will not hesitate in allocating funds for the respect of “Gomata”.
Goyal also announced a separate Department for Fisheries.
Commenting on the Interim Budget, Deloitte India Partner Tapati Ghose said in a statement. “The tax breaks for the salaried, middle class, pensioners
“Without losing much of the tax revenue, the government has managed to please a huge chunk of taxpayers” Nangia Advisors Managing Partner Rakesh Nangia said.