Piyush Goyal cuts the cake that Jaitley baked! Budget 2019, is an Interim Budget as our country goes for General Election in April-May 2019. But it did not lack the attention as it is a race to be popular among political parties. We must look at it in a more refined way. It is not wrong to have expectations but a balance is what a good Budget sets to achieve.
Budget 2019 looks like a picture of India we all want to see. Let us check how it is framing up. Here is analysis & details of Budget 2019 – both form Investor Point of View and a general overview for the society.
A budget has a huge canvass – Right from farming to Electric Vehicles. So it is like taming wild horses- tied to one chariot.
Farmers to Business owners, Salaried to Millenials all need be kept in the loop!
Well, Budget 2019 had “something of everyone”.
Important Announcements in Budget 2019
Change in Taxation in Budget 2019
- Lower Slab of Rs 5 Lakhs rationalized
No- THEY HAVEN’T CHANGED THE BASIC EXEMPTION LIMIT
They have just made changes in sec 87A i.e. Rebate which was earlier available for Assessee’s whose Total Income was up to Rs.3,50,000 now raised to Assessee’s whose Total Income would be up to Rs. 5,00,000 and Amount of Rebate raised from Rs. 2,500 to Rs. 12,500.
A person whose total income is above Rs.5,00,000/- will not get any tax advantage. In fact, they will be governed by existing slab rates of Rs. 2,50,000 and so on . The change is on the rebate that you get after tax.
We give you some income scenarios to compare pre-budget and post-budget changes. Ready Recknower Here
2. TDS limit for FD or Post Office Schemes increased from Rs 10000 to Rs 40000.
3. Standard Deduction increased to Rs 50000 from Rs 40000.
4. TDS threshold on rent to be raised to Rs 2.4 lakh.
5. Capital tax Benefit u/s 54 has increased from investment in one residential house to two residential houses. Rollover of capital gains to be increased from investment in one residential house to two houses for capital gains up to INR 2 crore .
Explanation: the long-term capital gains tax arising out of the sale of a property up to Rs 2 crore could be used to buy two properties in the lifetime on an individual.
6. TDS for rent raised from Rs 1.8 Lakhs to Rs 2.4 Lakhs.
7. Within 2 years all assessments/scrutiny will be done online. No role of the tax officer. This is a welcome move to bring transparency and corruption.
8. No tax on notional rent of second house.
Change in Investments in Budget 2019
- Nothing changes in MF or Equity related investments.
- Tax-Free Gratuity limit raised to Rs 30 Lakhs from existing Rs 20 Lakhs.
- New Pension Scheme (NPS) was liberalized and the Government contribution is increased by 4% making it 14%.
Changes in General in Budget 2019 – Long Term Impact
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Pradhan Mantri Shram-Yogi Maandhan
Pradhan Mantri Shram-Yogi Maandhan for the unorganized sector workers with monthly income up to Rs.15,000 has been announced. This scheme shall provide them an assured monthly pension of Rs.3,000 from the age of 60 years. Contribution range from Rs 55 to 100 as per joining age.
Pradhan Mantri Shram-Yogi Maandhan after implementation can be one of the largest pension schemes of the world.
- Pradhan Mantri Kisan Samman Nidhi (direct income support of Rs 6000 pa for cultivable landowners below 2 Acres) = Rs. 20,000cr in FY19 (0.11% of GDP) and Rs. 75,000cr in FY20 (0.36% of GDP) = Rs. 95,000 crores
Will update more details when clarification comes.
Every year when the FM presents the Union Budget, there are hopes and fears of the changes one needs to make in their investment and savings portfolio to get tax benefits. Our advice to investors is that it is best to stay focused on their goals and follow a disciplined asset allocation path and not be perturbed by market noises.
Events like the Budget remain mere events when seen from a long term Wealth Creation journey. The achievement of long term goals is what the retail investors should endeavor to achieve.
Happy Investing!!!
