Finance Minister Nirmala Sithraman presented the new Modi Government’s first budget and her first maiden budget today. The overarching goal of the new Modi Government is to make the Indian economy a $5 Trillion economy in the coming years.
The proposals in the new 2019 Budget were aligned towards achieving this goal of the Government. The policies proposed are focussed towards enabling growth, simplifying tax administration, providing affordable housing, increasing quality of education, empowering entrepreneurs and making investments easier for NRIs.
The Budget had a pronounced focus on helping NRIs trying to invest in Indian equities by simplifying the KYC and investment processes. In aiding these efforts, obtaining of Aadhaar has been made easier for NRIs as they no longer have to wait for 180 days to apply for an Aadhaar. This is a boon for NRIs looking to investing in the growth story of Indian companies.
Here are the key highlights from the Budget 2019:
- No taxes for citizens with income lower than Rs 5 lakh. But the Finance Minister did not propose any change in the income tax slabs.
- To help pensioners, there will no tax levied on the lump sum withdrawal of 60% from NPS at the time of maturity.
- Buying house became slightly easier with an additional tax deduction of Rs 1.5 lakh on interest paid on loans borrowed up to 31 March 2020 for purchase of house up to Rs 45 lakh.
- To simplify processes and make the ITR filing easier, the Government is proposing the interchangeability of PAN card and Aadhaar card.
- Pre-filled income tax returns are to be made available to taxpayers and will contain information about their salary, bank interest, capital gain from securities and dividend income.
- To quicken the process of the income tax assessment, the Government plans to launch Faceless Income Tax Assessment in electronic mode in a phased manner.
- High net-worth individuals to face a surcharge hike of 3% for individuals with income between Rs. 2 to Rs. 5 Crores and 7% for individuals with income higher than Rs. 5 Crores.
- In efforts to boost electric vehicle adoption, additional income tax deduction of Rs. 1.5 Lakh on the interest paid on the purchase of electric vehicles through loans.
- Though owners of fuel-powered engine vehicles see no positives in the Budget, as the fuel becomes more expensive with a special additional excise duty of Rs. 1/Litre on petrol, diesel for road and infrastructure proposed.
- Prices of gold and precious metals to become dearer as the Budget increases the import duty from 10% to 12%.
- In order to boost digital payments, the Budget has proposed Tax Deduction at Source of 2% on cash withdrawal exceeding Rs. 1 Crore in a year from a single bank account.
Finance Minster Nirmala Sithraman, concluded the Budget 2019 speech with a positive note about the fiscal deficit having been reduced by 0.1% from 3.4% to 3.3%.