The interim Budget 2019 of India by an interim finance minister has left a permanent imprint. The Union Budget 2019, which comes ahead of the all-important election,  was a fine act of balance between the middle class and the farmers. As expected, Budget 2019 has left no stone unturned to give relief to the masses.  Let us look at the main points and understand its implications on your money.

More money in your hands – The Budget has proposed an income tax rebate, effectively providing that those earning less than Rs 5 lakh (post incentives on savings). This is a welcome jump instead of the marginal tinkering of the past. This means if your income is Rs 6.5 lakh and you invest Rs 1.5 lakh in Section 80C tax saving avenues, the entire Rs 6.5 lakh income could be tax-free. This leaves taxpayers with more money in their hands so that they can spend it on consumption. They can also take loans and get a lower burden of EMI since they will now have

The money in the hands of salaried individuals can be larger. This is because standard deduction for salaried has been increased from Rs 40000 to Rs 50000. Last year while presenting Budget 2018, finance minister Arun Jaitley had responded to the long-standing demand to bring back standard deduction. The concept of standard deduction is aimed at providing for the expenses of an employee’s daily upkeep. Not just reduced income tax liability, there is also reduced paperwork since standard deduction is extended without asking for any proof of expense or investment.

TDS relief – Interim Finance Minister Piyush Goyal in Budget 2019 has given a big relief to millions of bank fixed deposit investors. It has been proposed that the threshold for TDS on interest earned on bank fixed deposit to be raised to Rs 40000 compared to Rs 10000 earlier.

This will greatly reduce the administrative hassles of the bank FD investors. Now, if the interest earned on bank fixed deposits exceeds Rs 40,000 in a financial year, then only the bank would collect TDS at the rate of 10 per cent and remit it to the central government. Do remember this does not end the tax liability of the individual. You as a bank FD holder are expected to assess own tax liability taking into account income tax slab rate and pay additional tax wherever applicable.

Home benefits – There is more reason to take home loans and get another home. The Budget 2019 proposed the notional rent on the second self-occupied house should be done away. At present, the income tax on notional rent is payable if one has more than one self-occupied house.

Considering the difficulty of the middle class having to maintain families at two locations on account of their jobs, children education, parents etc, the Budget of 2019 has proposed to exempt levy of income tax on notional rent on a second self-occupied house.

Also, the TDS threshold of rent has been increased from Rs 1.8 lakh to Rs 2.4 lakh.

On the housing side, as an amendment to Section 54 of the Income Tax Act, the benefit of rollover of capital gains has been proposed to be increased from 1 residential house to that of two now. This is for a taxpayer having capital gains up to Rs 2 crore. This benefit could be exercised once in the lifetime of the taxpayer.

Other key benefits – Farmers have been given a lot of focus, amid talks of agrarian distress. The Budget 2019 has proposed giving Rs. 6000 per annum has to every farmer having up to 2 hectares land. The amount will be transferred in 3 instalments.

Key rural focussed budget announcement includes National Kamdhenu Ayog for cows, Rs 750 crore allocation for National Gokul Mission, interest subvention for farmers pursuing animal husbandry. Interest subvention for farmers affected by natural calamities has also been proposed. Plus, there is interest subvention for timely payment by farmers.

With an eye on wooing unorganized workers, the government has announced the Pradhan Mantri Shram Yogi Mandhan. It will provide assured monthly pension of Rs 3,000 with the contribution of Rs 100 per month for workers in the unorganized sector after 60 years of age.

The focus remains on employment as India is poised to become a $5 trillion economy in the next 5 years. With this in mind, measures to help ease cash flows of SME/ MSME’s have been announced in the Union Budget 2019.

A scheme of sanctioning loans up to Rs 1 crore in 59 minutes has been launched in Budget 2019. MSME/ SMEs with earnings below Rs. 5 crore will soon have to file GST only once in 3 months. A, 2% interest subvention scheme on MSME loans with a ticket size of Rs. 1 crore has been announced. Moreover, Govt projects now have to source 25% of their requirements from SMEs. Of this, the material to the extent of at least 3% will be sourced from women-owned SME’s.

The interim Budget 2019 stands out for striking the right cords amidst global markets turmoil and election fervour at home.

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