Central Budget 2019 targets Indian economy to touch $3 trillion mark in the year 2019-20 and being the third-largest economy. It covers all the major sectors of the economy.
Taxpayers are benefitted through various tax deduction schemes and easier compliance policies.
TAXATION
The proposals made by the finance minister Simplifies tax administration and ensure greater transparency. Tax proposals will stimulate growth, incentivize affordable housing and promote start-ups and digital economy
The Direct tax revenues increased by 78% to 11.37 lakh crore in FY19 and its growing at double-digit every year.
Corporate Tax
25% tax for all companies with an annual turnover of Rs 400 crore. This will cover 99.3% of all companies.
Startup friendly budget and Angel Tax
Funds raised by Startups will not face any scrutiny by the income tax department. A verification mechanism for investors and companies will be set up. A mechanism to alleviate issues with pending cases on angel tax will be set up by CBDT.
| Affordable Housing | Additional deduction of INR1.5 lakhs on housing loan interest of Rs 45 lakh or below |
| Electric Vehicles | An additional income tax deduction of INR1.5 lakhs on vehicle loan interest |
| One nation One card for travel | Multiple transport charges across India can be made easier through national common mobility. This will be a Rupay card, and allow its users to pay bus charges, parking charges etc. |
Tax Filing
Budget Proposes a series of measures to leverage technology and make compliance easier for the taxpayer. Among which include:
PAN and Aadhar Interchangeable – Now you can file IT returns with Aadhar.
Pre-filled tax returns will be available for taxpayers with details of tax deductions, bank deposits, information collected from various sources. This makes IT return filing much easier.
Customs Duty
| Import of defence equipment not being manufactured in India | Exempt from Basic customs duty. |
| Imported Books | 5% customs duty. Imported books to cost more in order to promote local publishing |
| Petrol and Diesel | Special duty and road cess on petrol and diesel to be increased by INR 1each a litre |
| Gold and Precious Metals | Increase in customs duty and precious metals from 10% to 12.5%. |
Indirect tax
- GST will be further simplified further to a single monthly return. Taxpayers with an annual turnover of less than 5crore have to file only quarterly return.
- No separate e-way bill from 2020, e-Invoice System will be introduced
- Closure of pending GST cases through Legacy Dispute Resolution is proposed.
Digitalizing
- Faceless assessment without manual intervention will be launched.
- Levy of TDS at the source of 2% for cash withdrawals exceeding `1crore from a bank account is proposed in the budget to discourage business payment in cash
- Business establishments with an annual turnover of over `50 crore will give digital payment to customers and no charges on MDR on business and customer
| MSME | START-UPS |
| The government will create a payment platform for MSMEs to enable filing of bills and payment on the platform itself to reduce payment time. | Doordarshan is to start a new tv channel under its bouquet to help startups to diffuse information. |
| `50 crore allocated for MSME for FY20 at 2% interest under interest subvention schemes. | Stand-up India programmed to be extended till 2025.
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OTHERS
- Pension benefits will be offered to 3 crore retail traders and shopowners with an annual turnover of less than INR 1.5 crore under a new scheme called Pradhan Mantri Man Dhan Scheme
- 100% FDI will be permitted for insurance intermediary.
- NRI investment in the Indian capital market is less. Finance minister proposes to merge the NRI portfolio investment scheme route with FPI route.
- Credit Guarantee Enhancement Corporation will be set up in 2019-20, action plan to deepen markets for long-term bonds with a specific focus on infra sector to be put in place.
- Public holding in listed firms is to go up to 35% from the current 25%
- On purchase of high-rate pooled assets of NBFC amounting of Rs 1 lakh crore in this FY, the government will provide one-time 6-month credit guarantee
- Social stock exchange – a listing of social/voluntary organisations as an electronic fundraising platform to help raise funds.
- Aadhar cards will be issued to NRIs with Indian passport after their arrival in India without waiting for mandatory 180 days.