The interim Budget 2019 focussed on the lower and middle-class groups along with promises of incentives for the agrarian sector
Union Budget 2019: Today’s budget has created headlines for more than one reason. As the most talked about aspect of today’s budget remains the tax exemption of income up to Rs 5,00,000 per annum, there is no doubt that the budget will woo middle-class voters ahead of 2019 general elections.
Here is L. Badri Narayanan, Partner, Lakshmikumaran & Sridharan attorneys, take on today’s budget.
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The interim Budget 2019 focussed on the lower and middle-class groups along with promises of incentives for the agrarian sector.
The Budget promises annual assistance of Rs 6,000 annually to the farmers having a cultivable land up to 2 hectares under the newly launched Pradhan Mantri Kisan Samman Nidhi (PM-Kissan) Scheme. This amount will be credited to the farmer’s accounts directly.
The other scheme introduced by the Finance Ministers is aimed at workers in the unorganised sector having income up to Rs 15,000. These workers can get entitled to a monthly pension of Rs 3,000 from the age of 60 years by contributing in Pradhan Mantri Shram-Yogi Maandhan.
In a welcome-break from the usual interim budget presentation, the Finance Minister has sought to pass to the middle-class Indians the benefit of higher tax collections by reducing their tax liability. However, ensuring the benefit reaches to the intended group, the exemption is in the form of a tax deduction for individuals whose taxable income is up to Rs 5,00,000 rather than changing the income tax slabs, which has a cascading effect on the entire strata of taxpayers. The exemption is in the form of a rebate of up to Rs 12,500 (which is the tax liability of a person whose income is Rs 5,00,000. The rebate is not available to individuals whose effective income is higher than Rs 5,00,000 thereby ensuring that tax buoyancy is maintained beyond Rs 5,00,000 but at the same time the middle class gets a big relief.
The other concession that the Budget is extended is in the form of relieving the taxpayers from payment of tax on notional rent value of the second house property held by them.
In terms of corporate tax, relief has been provided to the real-estate sector as the builders holding unsold inventory up to two years (as against one year before amendment) from the project completion will not be required to pay tax on notional rent. Further, the due-date for getting housing projects registered to enjoy tax deductions under the affordable housing scheme has been increased from 31 March 2019 to 31 March 2020. This is a boost for the real estate sector which has been facing a crisis for the last few years for various reasons.