July 5, 2019
Union Finance Minister Nirmala Sitharaman presented her maiden Budget in the Parliament on Friday. While the Budget was sprinkled with a few hits and misses, it mostly failed to live up to the expectations of many and fell short of any mega announcements.
There are a few exemptions for taxpayers, a few duty hikes and a few announcements of such as PAN and Aadhaar being alternative modes of identification henceforth. Here’s how Budget 2019 will affect you as a common citizen:
Sitharaman on Friday said PAN and Aadhaar have been made interchangeable, allowing those who do not have PAN to file income tax returns. Thus, those who do not have PAN, can now just quote Aadhaar to file tax returns. Making the announcement, Sitharaman said that 120 crore Indians now have Aadhaar.
HOME LOANS, VEHICLE LOANS
In a relief for those who have take housing loans, Sitharaman on Friday said the Modi government is proposing additional tax deduction of Rs 1.50 lakh on interest paid on home loans taken up to March 2020.
Presenting the first Budget of the Modi government 2.0, Sitharaman also said the Centre will also provide income tax deduction of Rs 1.5 lakh on interest paid on loans taken for purchase of electric vehicles. The move is being seen as a means to promote use and purchase of electric vehicles that will reduce pollution and carbon emissions.
Income tax slabs for middle and lower income groups remain unchanged. For the higher income group, Sitharaman proposed to enhance surcharge of 3 per cent on individuals. Citizens with an income between Rs 2 crore and Rs 5 crore will have to pay higher tax. For individuals earning more than Rs 5 crore a year, the applicable surcharge will be 7 per cent.
Making the announcement, Sitharaman said those who earn more should pay more taxes to push for better growth of the nation.
Lower income groups with an income below Rs 5 lakh will continue to be exempted of paying tax.
The Modi government has announced TDS of 2 per cent on cash withdrawal of more than Rs 1 crore from a bank account in a year. The move is to discourage withdrawals of big amounts of cash and promote digital transactions.
CAMERA, AUTO PARTS
Nirmala Sitharaman has announced that basic customs duty on auto parts, optical fibres, digital camera, cashew, certain synthetic rubber, and vinyl flooring have been hiked.
The Union Budget 2019 made provisions to raise customs duty on gold and precious metals to mobilise resources. Prices for gold and other precious metals will go up with the latest announcement. Customs duty on import of gold has been hiked from the current 10 per cent to 12.5 per cent, thus making gold even costlier.
In a bid to promote use of electric vehicles and reduce pollution, the government has announced income tax reduction of Rs 1.5 lakh for loans taken to purchase electric vehicles.
The government has raised special additional excise duty and road cess on petrol and diesel by Re 1 per litre each. Nirmala Sitharaman said lower crude oil prices provided her with an opportunity to review taxes on the sector. Union minister Nitin Gadkari defended the fuel price hike saying this will help to have more funds available for infrastructure development.
Every verified woman Self-Help Group (SHG) member with a Jan Dhan account to get an overdraft of Rs. 5,000, announced Nirmala Sitharaman under the ‘Mudra Yojana’ in her Budget speech on Friday. She said that the government wishes to encourage women with the motive of ‘Nari to Narayani’.
Also, one woman in every Self-Help Group will be allowed a loan of Rs 1 lakh.
The finance minister also said that a 5 per cent customs duty has been imposed on imported books.
The government has proposed to consider issuing Aadhaar cards to NRIs holding Indian passports in India without having to wait for the necessary 180 days.