The Interim Budget 2019 Part-1

The last budget of the NDA Government was presented on 1st February by interim Finance Minister Piyush Goyal. This is the interim budget as the general elections will take place after two months and the new government will take charge.The interim budget is generally vote-on account.

The government of the day presents an interim budget if it does not have the time to present a full Budget or because national elections may be near. It leaves it to the next government to present the full Budget. As per the convention the Government do not propose to make any amendment into the Income Tax Act as the current government has only 2 months left in the office. However in this interim budget some amendments are proposed in 87A of Income Tax Act.

Here the key highlights and the announcements of the Interim Budget 2019:-

Farmers and Agricultural Economy:

Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)- To provide an assured income support to the small and marginal farmers, Government is launching PM-KISAN. Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of ₹6,000 per year. This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of ₹2,000 each. This programme will be funded by Government of India. The programme would be made effective from 1st December 2018 and the first instalment for the period upto 31st March 2019 would be paid during this year itself. This programme will entail an annual expenditure of ₹75,000 crore.
The Government has increased the allocation for Rashtriya Gokul Mission to ₹750 crore in the current year. The Government has announced setting up of "Rashtriya Kamdhenu Aayog" to upscale sustainable genetic up-gradation of cow resources and to enhance production and productivity of cows. The Aayog will also look after effective implementation of laws and welfare schemes for cows.
A separate Department of Fisheries will be created to provide sustained and focused attention towards development of this sector.
Government proposes to provide the benefit of 2% interest subvention to the farmers pursuing the activities of animal husbandry and fisheries, who avail loan through Kisan Credit Card. Further, in case of timely repayment of loan, they will also get an additional 3% interest subvention.
Government has also decided that all farmers affected by severe natural calamities, where assistance is provided from National Disaster Relief Fund (NDRF), will be provided the benefit of interest subvention of 2% and prompt repayment incentive of 3% for the entire period of reschedulement of their loans.

Labour and Workers:

Keeping the contribution of the employee at 10% in New Pension Scheme (NPS), Government has increased the Government contribution by 4% making it 14%. Maximum ceiling of the bonus given to the labourers has been increased from ₹3,500 pm to ₹7,000 pm and the maximum ceiling of the pay has been increased from ₹10,000 pm to ₹21,000 pm. The ceiling of payment of gratuity has been enhanced from ₹10 lakhs to ₹20 lakhs. The ceiling of ESI's eligibility cover has been increased from ₹15,000 pm to ₹21,000 pm. Minimum pension for every labourer has been fixed at ₹1,000 per month. In the event of death of a labourer during service, the amount to be paid by EPFO has been enhanced from ₹2.5 lakh to ₹6 lakh. Under Anganwadi and Asha Yojana honorarium has been enhanced by about 50% for all categories of workers.
Government proposes to launch a pension yojana namely 'Pradhan Mantri Shram-Yogi Maandhan' for the unorganised sector workers with monthly income upto ₹15,000. This pension yojana shall provide them an assured monthly pension of ₹3,000 from the age of 60 years on a monthly contribution during their working age. An unorganised sector worker joining pension yojana at the age of 29 years will have to contribute ₹100 per month till the age of 60 years. A worker joining the pension yojana at 18 years, will have to contribute ₹55 per month only. The Government will deposit equal matching share in the pension account of the worker every month. A sum of ₹500 crore has been allocated for the Scheme. Additional funds will be provided as needed. The scheme will also be implemented from the current year.
A Committee under NITI Aayog will be set up to complete the task of identifying De-notified, Nomadic and Semi- Nomadic communities not yet formally classified. Government will also set up a Welfare Development Board under the Ministry of Social Justice and Empowerment specifically for the purpose of implementing welfare and development programmes for De-notified, Nomadic and Semi-Nomadic communities. The Board shall ensure that special strategies are designed and implemented to serve these hard-to-reach communities.

MSMEs and Traders:

GST registered SME units will get 2% interest rebate on incremental loan of ₹1 Crore. The requirement of sourcing from SMEs by Government enterprises has been increased to 25%. Of this, the material to the extent of at least 3% will be sourced from women owned SMEs.

Infrastructure development:

Government will introduce container cargo movement to the North East as well, by improving the navigation capacity of the Brahmaputra river.
Capital support from the budget for railways is proposed at ₹64,587 crore in 2019-20 (BE). The Railways’ overall capital expenditure programme is of ₹1,58,658 crore. The Operating Ratio is expected to improve from 98.4% in 2017-18 to 96.2% in 2018-19 (RE) and further to 95% in 2019-20 (BE).
Allocation for the North Eastern Areas is being proposed to be increased by 21% to ₹58,166 crore in 2019-20 BE over 2018-19 BE.

Entertainment:

Single window clearance for ease of shooting films, available only to foreigners, is now going to be made available to Indian filmmakers as well. Government will also introduce anti-camcording provisions in the Cinematograph Act to control the menace of piracy.

Tax Proposals:

Government has approved a technology intensive project to transform the Income-tax Department into a more assessee friendly one. All returns will be processed in twenty-four hours and refunds issued simultaneously. Within the next two years, almost all verification and assessment of returns selected for scrutiny will be done electronically through anonymised back office, manned by tax experts and officials, without any personal interface between taxpayers and tax officers.
Individual taxpayers having taxable annual income up to ₹5 lakhs will get full tax rebate and therefore will not be required to pay any income tax.
For salaried persons, Standard Deduction is being raised from the current ₹40,000 to ₹ 50,000.
Government has proposed to exempt levy of income tax on notional rent on a second self-occupied house.
TDS threshold on interest earned on bank/post office deposits is being raised from ₹10,000 to ₹40,000.
the TDS threshold for deduction of tax on rent is proposed to be increased from ₹1,80,000 to ₹2,40,000 for providing relief to small taxpayers.
The benefit of rollover of capital gains under section 54 of 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 ₹2 crore. This benefit can be availed once in a life time.
For making more homes available under affordable housing, the benefits under Section 80-IBA of the Income Tax Act is being extended for one more year, i.e. to the housing projects approved till 31st March, 2020.
Also, for giving impetus to the real estate sector, I have proposed to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years, from the end of the year in which the project is completed.

10 Point Vision for the Next Decade:

Physical as well as social infrastructure
Digital India
Making India a pollution free nation
Expanding rural industrialisation using modern digital technologies
Clean Rivers
Coastline and ocean waters powering India’s development and growth
Space programme
Making India self-sufficient in food, exporting to the world to meet their food needs and producing food in the most organic way
A healthy India
Minimum Government Maximum Governance nation

Fiscal Programme:

The revised estimate (RE) of Fiscal Deficit for the year of 2018-19 is 3.3% and the Budgeted Estimate (BE) for the year 2019-20 is 3.4% of the GDP.
Total expenditure rises from ₹24,57,235 crore in 2018-19 RE to ₹27,84,200 crore in 2019-20 BE, a rise of ₹3,26,965 crore or approximately 13.30%. Capital Expenditure for 2019-20 BE is estimated to be ₹3,36,292 crore. Centrally Sponsored Schemes (CSS) are proposed to be allocated ₹3,27,679 crore in BE 2019-20 as against ₹3,04,849 crore in 2018-19 RE. Allocation
for National Education Mission is being increased from ₹32,334 crore in RE 2018-19 to ₹ 38,572 crore in BE 2019-20. Allocation for Integrated Child Development Scheme (ICDS) is being increased from ₹23,357 crore in RE 2018-19 to ₹27,584 crore in BE 2019-20.
The allocation of ₹56,619 crore made in BE of 2018-19 for Scheduled Caste, further increased to ₹62,474 crore in RE is proposed to be enhanced to ₹76,801 crore in BE for 2019-20, an increase of 35.6% over BE of 2018-19. For the Scheduled Tribes also, proposed allocation in 2019-20 BE is ₹50,086 crore as against ₹39,135 crore in BE 2018-19, an increase of 28%.
The disinvestment target for the year 2019-20 is ₹80,000 crore.
Stamp duties would be levied on one instrument relating to one transaction and get collected at one place through the Stock Exchanges. The duty so collected will be shared with the State Governments seamlessly on the basis of domicile of buying client.