As Finance Minister Nirmala Sitharaman presents her first Union Budget on July 5, speculation is rife about the steps in several sectors ranging from income tax to agriculture.
The interim budget, a vote on account, presented by then Finance Minister Piyush Goyal for the financial year 2019-2020 came up with several announcements which were path-breaking.
Here is a relook at major announcements of the interim budget, presented on February 1, which may have set the track for the full budget:
* In a major relief to taxpayers, Goyal proposed to double the tax exemption threshold for individual annual incomes from the current Rs 2.5 lakh to Rs 5 lakh. Individuals with yearly income within the proposed limit will not have to pay any income tax for the next fiscal.
“Individual taxpayers having taxable annual income up to Rs 5 lakh will get full tax rebate and therefore will not be required to pay any income tax.
“As a result, even persons having gross income up to Rs 6.50 lakh may not be required to pay any income tax if they make investments in provident funds, specified savings, insurance, among others,” Goyal had said.
* He also announced that the standard deduction would be raised to Rs 50,000 from Rs 40,000 and the TDS (tax deduction at source) threshold would be raised from Rs 10,000 to Rs 40,000 on interest earned on bank and post office deposits.
* Addressing the distress in the agrarian sector, Goyal announced a scheme to provide direct income support of Rs 6,000 to farmers with a land holding up to two hectares, which would benefit about 12 crore people.
He also announced expansion of the interest subvention for loans taken under Kisan Credit Card to farmers involved in animal husbandry and fishing.
* Goyal told the Lok Sabha that the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) will be effective from December 1, 2018.
* For the unorganised sector Goyal announced a new scheme ‘Pradhan Mantri Shram Yogi Mandhan’, to provide assured monthly pension of Rs 3,000 per month for workers in the unorganised sector. He said the scheme will benefit 10 crore workers and might become the world’s biggest pension scheme for the unorganised sector in the next five years.
Under the scheme, the workers would receive a monthly pension of Rs 3,000 after 60 years of age. The workers will then have to contribute Rs 100 per month towards the scheme.
* With an aim to support the MSME sector, the government announced 2 per cent interest subvention for micro, small and medium enterprises (MSMEs) for loans up to Rs 1 crore.
* Budgetary allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) was increased by Rs 5,000 crore year-on-year to Rs 60,000 crore, which is highest-ever allocation to the programme since its launch in 2006.
For the real estate sector, Goyal had proposed to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years, from the end of the year in which the project is completed.
* The minister also proposed to exempt the levy of income tax on notional rent on a second self-occupied house. Currently, income tax on notional rent is payable if a person has more than one self-occupied house.
* In a major push for the affordable housing segment, the Finance Minister also proposed to extend the benefits under Section 80-IBA of the Income Tax Act for one more year till March 2020.
* Fund allocation for sports was raised by Rs 214.20 crore in the interim budget, which also includes an increase of Rs 55 crore in funds for the Sports Authority of India (SAI).
*The defence budget of the country crossed Rs 3 lakh crore-mark as the outlay for the armed forces was increased in the interim budget to Rs 3,05,296 crore against last year’s revised estimate of Rs 2,85,423 crore — a hike of 6.96 per cent.
* The defence modernisation programme is expected to remain on track as Rs 1,03,380 crore has been earmarked for the acquisitions against Rs 93,982 crore last year.
* With a vision to expand the country’s space programme and sending an Indian astronaut into space by 2022, the government allocated more than Rs 10,000 crore for space programme in the interim budget.
* Under various heads, while Rs 7,483 crore was allocated to the space technology, Rs 1,885 crore was earmarked for space applications.