Interim budget 2019 to benefit farmers, workers and salaried taxpayers
New Delhi : The first session of Interim Budget 2019-20 is likely to end with happy notes. The content present by FM Goyel aims at benefitting three major segments of the population including farmers, informal workers, and salaried taxpayers, with introduction of income support scheme for farmers, insurance scheme for informal sector workers and tax rebate for salaried workers.
Finance Minister Piyush Goyal in his speech today announced the proposal of the Pradhan Mantri Kisan Samman Nidhi Scheme, which aimed at providing income support to vulnerable landholding farmers.
“Under this programme, vulnerable landholding farmer families, having cultivable land up to 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year,” Mr Goyal said. “This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs. 2,000 each. This programme will be funded by Government of India and will entail entail an annual expenditure of Rs. 75,000 crore.”
While keeping tax rates unchanged, the Finance Minister announced that those earning up to Rs. 5 lakh a year would be exempt from income tax. This, he said, effectively meant that those earning Rs. 6.5 a year would not need to pay tax if they made full use of the Rs. 1.5 lakh exemption available under Section 80C of the Income Tax Act.
He further said that the standard deduction limit for salaried taxpayers would be raised to Rs. 50,000 from the Rs. 40,000 announced in last year’s Budget. “This will provide additional tax benefit of Rs. 4,700 crore to more than three crore salary earners and pensioners,” the Finance Minister said.
The Tax Deduction at Source (TDS) threshold on interest earned on bank/post office deposits has been proposed to be raised from Rs. 10,000 to Rs. 40,000. Further, the TDS threshold for deduction of tax on rent has also been proposed to be increased from Rs. 1,80,000 to Rs. 2,40,000.
Piyush Goyal also proposed to exempt the levy of income tax on notional rent on a second self-occupied house. At present, income tax on notional rent is payable if one has more than one self-occupied house.
He added that this relief was being provided considering the difficulty of the middle class having to maintain families at two locations on account of their jobs, children’s education, or the care of parents. Simultaneously, he proposed to increase the benefit of a rollover of capital gains under Section 54 of the Income Tax Act from investment in one residential house to two residential houses for a taxpayer having capital gains up to Rs. 2 crore. This benefit can be availed only once in a lifetime, he said.
For relaxed sector workers, the Finance Minister announced the Pradhan Mantri Shram Yogi Maandhan Scheme designed to ensure a fixed monthly pension of Rs. 3,000 per month for informal sector workers above the age of 60. The contribution would be Rs. 100 per month for those joining the scheme at the age of 29, while it would just Rs 50 a month for those joining at the age of 18. The government will match the monthly contributions with an equal contribution of its own.
Regarding fiscal, the Minister said that the government would once again miss its fiscal shortage target of 3.3% for the year, with a fiscal deficit of 3.4% for 2019-20. The target of 3% will be achieved in 2020-21, he said. The reason for the slippage, he said, was the increased expenditure on account of the income support scheme for the farmers, for which Rs. 20,000 crore was allocated this year itself.