Union Budget 2019: Highlights, Key Takeaways; (TE members, What were your expectations???)

[swatkats]

1. Direct Taxation – Budget 2019 Highlights

1. Interest deduction on housing loan under Section 80EE increased by 1.5 lakhs for home loans taken on self-occupied house property by 31/3/2020, houses with the cost of Rs 45 lacs will be eligible for this.
2. Interchangeability of PAN and Aadhar for ease and convenience of taxpayers! Income Tax return can be filed using Aadhar Number!!
3. To discourage cash payments TDS@2% on withdrawals exceeding 1Cr per annum from a bank account
4. Surcharge for individuals having taxable income from Rs 2 crores to Rs 5 crores increased to 18% from 15%
5. Surcharge for individuals having taxable income from Rs 5 crores to Rs 10 crores increased to 22% from 15% – FY 2019-20
6. Proposal to give relief in levy of securities transaction tax
7. Corporate tax worth 25% that is applicable to companies with an annual turn over Rs 250 crore will be applicable to the ones with an annual turnover of Rs 400 crore
8. 35AD extended to Li-On battery, Semi-Conductor, Laptops, Fabrication & Photo Volic

2. Infrastructure – Budget 2019 Highlights

1. Focus on investment in infrastructure, national highways and aviation sectors
2. The second phase of Bharat Mala to develop state highways
3. A comprehensive restructuring of national highways will be taken up

3. Education – Budget 2019 Highlights

1. National education policy to propose major changes in both secondary and higher education
2. Swayam Initiative – Digital education to be promoted
3. Greater focus on research and development – National Research Foundation to fund and promote research – pooling of research grants from various ministries and disbursing them, preventing duplication of research projects
4. For the Youth – New national educational policy to transform the Indian education system

4. Startup Development – Budget 2019 Highlights

1. Government to introduce a host of exclusive programs for startups on DD News

5. Household – Budget 2019 Highlights

1. Provision of housing, electricity, clean cooking facility, safe and adequate drinking water to all in rural India
2. Encouragement of rainwater harvesting, groundwater recharge, and management of household wastewater for reuse in agriculture
3. Har Ghar Jal – to all rural household by 2024
4. 7 crore LPG connections delivered to rural households

6. Pension – Budget 2019 Highlights
1.Proposed pension benefit to 3 crore retail traders and shopkeepers whose annual turnover is up to Rs 1.5 crore

7. MSME- Budget 2019 Highlights

1. 350 crore rupees allocated for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans
2. MSME: Large-scale extensive reforms planned, government to create a platform for MSME payments
3. MSME to get loans up to 1 crore within 59 minutes. Loans worth Rs. 350 crore already disburse

8. Women Empowerment- Budget 2019 Highlights

1. Committee to be formed with Public and Private stakeholders for gender equality: FM
2. Every SHG Women having Jan Dhan Account – Rs. 5,000/- overdraft allowed: FM
3. Loan up to 1 lakh under Mudra Scheme for Women entrepreneurs: FM

9. NRI- Budget 2019 Highlights

1. Proposal for Issuance of Aadhar Card on arrival for NRIs with Indian Passports: FM
2. Aadhaar card for NRI’s post arrival in India
3. To increase NRI investment in Indian capital market – NRI portfolio scheme route and FPI route should merge

10. Budget – Railway Budget 2019 Highlights

1. Railway infra would need an investment of 50 lakh crores between 2018 and 2030;
2. PPP to be used to unleash faster development and delivery of passenger freight services
3. Railway Station Modernisation will be launched this year.
4. Indian Railways to be encouraged to invest more in urban and suburban regions
5. 657KM of Metro Rail operational in the country.

11. Banking and Financial Sector – Budget 2019 Highlights

1. Reforms will be taken to strengthen governance in Public Sector banks
2. NPAs of commercial banks reduced by over 1 lach crores over last year
3. Record Recovery of over 4lac crore with IBS
4. NPAs of commercial banks reduced by over 1 lakh crore over last year
5. After Consolidation of Public Sector Banks, now 70,000 Crore of Capital boost for credit improvement
6. Government has smoothly carried out consolidation, reducing the number of PSBs by 8
7. NBFCs – that are fundamentally sound, will get fundings from govt to a total of 1lakh crore during the current financial year
8. RBI has limited regulatory Authorities, Now the Regulatory Authorities of RBI over NBFC will be placed
9. Proposals for strengthening the regulatory authority of RBI over NBFCs – Debenture Redemption Reserve to be maintained
10. Proposal to return regulatory authority from NHB to RBI!

12. Electric Vehicles – Budget 2019 Highlights

1. Lower GST Rate from 12% to 5% on Electric vehicle and Additional Income Tax Deduction of 2.5 Lakh on Interest paid on loan taken to purchase an electric vehicle
2. To make electric vehicles affordable, additional IT deduction on 1.5 lakh on interest paid on loan taken to purchase electric vehicles

13. Technology – Budget 2019 Highlights

1. Solar storage batteries and chargers included in 35AD deduction: FM
2. Program of mass scaling of LED Bulbs – Approx. 35 Crores of LED bulbs distribute
3. Machines and robots to be deployed for scavenging

Source: https://cleartax.in/s/union-budget-2019-highlights

Achievements during 2014-19:

● 1 trillion dollar added to Indian economy over last 5 years (compared to over 55 years taken to reach the first trillion dollar).
● India is now the 6th largest economy in the world, compared to 11th largest five years ago.
● Indian economy is globally the 3rd largest in Purchasing Power Parity (PPP) terms.
● Strident commitment to fiscal discipline and a rejuvenated Centre-State dynamic provided during 2014-19.
● Structural reforms in indirect taxation, bankruptcy and real estate carried out.
● Average amount spent on food security per year almost doubled during 2014-19 compared to 2009-14.
● Patents issued more than trebled in 2017-18 as against the number in 2014.
● Ball set rolling for a New India, planned and assisted by the NITI Aayog.

 

[blr_p]

I was wondering whether they consulted Congress for this budget

No change in tax slabs means they definitely do not listen to Subramaniam Swamy when he says they should get rid of income tax.

I note how the stock market fell when this budget came out. Why is that. Usually we are used to seeing the stock market rally with this business & market friendly political party

1. 35AD extended to Li-On battery, Semi-Conductor, Laptops, Fabrication & Photo Volic

is this supposed to be exciting ?

 

[sushil.mudgil]

It was more of a filling exercise than anything else.

Nutshell - they continue to milk the dead cow called tax payers. They have done zero effort to increase tax base. On top, they are giving subsidies on a 25 lakh cars just because they are electrical with zero infra to charge these cars.... point less.... Don't understand what was the budget direction...it was graviating from north to south ... east to west.... While on one hand, they continue to screw salaried , they are giving more tax exemption to the industries...they are just good for distributing useless LED bulbs of 5 W which are barely enough to lit a 10x10 room....

What do i get in return... "Baba Ji ki thullu"

I am discounting the minority appeasement politics of current dispensation. How i wish , we had a capable opposition ...

Rant over!!!!!!!!!!!!!!!!

 

[blr_p]

Trying to find some interesting articles on the budget

Budget and the world

Resisting the temptation to print money and spend one’s way to growth, the finance minister has opted for incentivising private investment and borrowing abroad.

indianexpress.com

If we float dollar sovereign debt bonds then we get dollars. If we get dollars then the rupee appreciates. If the rupee were 50 to the $ we would already be a $5 trillion economy. How many trillions is dependent on dollar to rupee exchange rate. In 2024 rupee won't be at 70, it will either be 40 or 100. Hopefully the former.

We've not borrowed from abroad since 1991 for reasons explained in the article. So 2019 marks a change. Hopefully we do better with this than we did in the 80s where we did borrow from abroad and then went bust.

Strange GST slabs as they affect Development and Defence

[Finance Minister Nirmala Sitharaman on the way to presenting her first budget] There has been only a notional increase in Finance Minister Sitharaman’s defence allocation. It may not be suff…

bharatkarnad.com

Defence and what this budget means

Six Charts to Make Sense of India’s Budget for Foreign Policy

The Budget for foreign aid has gone up substantially.

thewire.in

What it means for foreign policy

 

[abhi1984]

I was wondering whether they consulted Congress for this budget

No change in tax slabs means they definitely do not listen to Subramaniam Swamy when he says they should get rid of income tax.

I note how the stock market fell when this budget came out. Why is that. Usually we are used to seeing the stock market rally with this business & market friendly political party



is this supposed to be exciting ?

This was a regressive budget by all means. They have huge budget shortfall because they still can't figure out GST. So they are trying everything to fill it up with desperate attempts to tax everything.

As for stock markets, Jaitley introduced LTCG tax thereby destroying lots of wealth.

Now, Foreign Portfolio Investors who enjoyed tax free status will now be taxed. So, Foreign inflows might be slowing down.

They are also taxing companies which try to return money to their shareholders - first there was dividend distribution tax and now Sitharaman has introduced buyback tax. So they asking companies to hoard money instead of giving it to back to their shareholders.

They have also propose public holdings in companies to be raised from 25% to 35% which means companies now need to dilute 10% of their holding. This has spooked people because the market might get lots of new paper. And even if companies get money for their 10% stocks, what are they supposed to do with it? If they pay dividends, they need to pay tax, if they buyback they need to pay tax.

Middle class got ghanta from this budget.

As for raising money in dollars, they might be too late to the liquidity party.

Given that they now have a huge majority some bigger takeaways were expected.

Now there is a rumor that Sitharaman can't handle the heat so they are banning reporters. They later clarified it was not a ban but restricted access. Who knows what is happening now.

 

[6pack]

In 2024 rupee won't be at 70, it will either be 40 or 100. Hopefully the former.

It would go to 100 most probably looking at past few years trends.

Indian govt and RBI controls the rupee value and keeps it always from appreciating because our exports suck in quality and quantity. They have been trying hard to keep it at 70 value from months now even though its risen to 68-67 in between. They want to decrease trade deficit. This was Manmohan's idea from 30+ years back in the 80's when the rupee was around 20 rupees to a dollar and it decreased to such a low level now. They know its a double edge sword where oil eats into our dollar reserves like a leech but still try to maintain the low rupee value to make exports look like they are rising in value every year. They only show value rising and not the quantity. In reality, Indian exports have lost to other countries like Bangladesh, Vietnam, Thailand, Philippines etc long time back and they are decreasing due to no added benefit and trade and other barriers like lack of electricity, water, red tape, corruption etc.

Our govt is run by short sighted people both in IAS as well as other fields. I don't have any hope for this country going forward now. Its just dragging itself on its knees from years due to sheer luck.

 

[blr_p]

SG's done a good job explaining this

The part where he says govt has stopped charging import duty on purchased arms !!!

We only get to learn about this because this year it will not be charged. I wonder why.

We paid $10bn for 36 Rafales. Is it one time only or resumes next year. S-400 will attract import duty ? Nation wants to know !

What slab import duty customs will charge when they arrive later this year. Since it is not a kit but already assembled product duty will be higher.

Duty as every one knows all too well is charged on landed cost.

Purchase + transport + insurance + various cesses

Recently, customs held back a shipment of spares for Mirage 2000 because military had not paid the duty.

Were the missiles we fired art Pakistan cleared of export control or is there some pending case

OMG !

 

[sushil.mudgil]

We only get to learn about this because this year it will not be charged. I wonder why

Who pays import duty. Purchaser or shipper?

IMO if its purchaser than makes little sense. basically your one arm is paying to other arm. This was announced pretty prominently in current budget. perhaps you missed it,,,

above was a long term demand of MOD and will give them more money in hands.

Post automatically merged: Jul 13, 2019

It would go to 100 most probably looking at past few years trends

I am wondering if i should start hoarding dollars now itself

 

[6pack]

I am wondering if i should start hoarding dollars now itself

Instead of dollars, probably Euros would be better. I have doubts about dollar staying where it is now because of Trump. EU is slowly moving away from SWIFT system now for buying selling internationally. In a year or two, they will ask India to join their system. EU, Russia, China, India and other countries like Saudi Arabia, Brazil, Japan etc if they move away from SWIFT system, dollar will start to lose its importance.

 

[blr_p]

Who pays import duty. Purchaser or shipper?

IMO if its purchaser than makes little sense. basically your one arm is paying to other arm. This was announced pretty prominently in current budget. perhaps you missed it,,,

above was a long term demand of MOD and will give them more money in hands.

I didn't miss it, i pointed it out because it seemed absurd to me that UNTIL NOW the military had to pay duty on arms.

Post automatically merged: Jul 13, 2019

It would go to 100 most probably looking at past few years trends.

I am questioning GDP in dollar terms and whether it makes any sense.

Some time in Oct '13 the Rupee slides from 50 to 70 in a day.

You mean to tell me our total economy contracted by 40% over night ?

Denominated in dollars it looks like that but not in Rs.

 

[6pack]

You mean to tell me our total economy contracted by 40% over night ?

No, I'm saying India does currency manipulation on a large scale and no other country seems to mind about it.

 

[abhi1984]

I am questioning GDP in dollar terms and whether it makes any sense.

Some time in Oct '13 the Rupee slides from 50 to 70 in a day.

You mean to tell me our total economy contracted by 40% over night ?

Denominated in dollars it looks like that but not in Rs.

Sometimes I wonder what goes in your mind. Only if people asked such basic questions their understanding would be much clearer.

Dollar denomination doesn't work like that. Mostly it is in constant currency terms i.e. a particular rate is used as a base and then used to calculate. If you look at Infosys, TCS etc results you can find the term "growth in constant currency". Example:
Infosys is expected to report 2-3 per cent sequential rise in revenue growth in constant currency (CC) terms on Friday

Read more at:
//economictimes.indiatimes.com/articleshow/70158444.cms"

It will be stupid to be constantly changing base rates.

What is funny though is your linked article from IE Express. India has taken a shot at a unified GST but failing miserably. There are lot of issues and the collection targets are not being met. Just yesterday I was given an option to buy something for INR 600 cash or pay 18% GST extra and pay digitally. My thoughts was that with Aadhar linkage in distribution and e-way bill etc made it impossible for people to cheat on taxes. Boy, I was naive.
The flip side is that now the government was to extract money from people who they deem to be "rich". The problem is it will just motivate more people to cheat on taxes and opt for Panama.

So, they need to borrow money to fill the gaping tax hole. The problem is that instead of using the money to increase consumption and growth, they are going to push more populist reforms. When it came to infrastructure spending the government instead talked about Public Private Partnership and privatizing government assets to raise money. It will be interesting to see how they pull it off. Because the middle class salaries person is the one going to be screwed off the most.

 

[blr_p]

Sometimes I wonder what goes in your mind. Only if people asked such basic questions their understanding would be much clearer.

Dollar denomination doesn't work like that. Mostly it is in constant currency terms i.e. a particular rate is used as a base and then used to calculate. If you look at Infosys, TCS etc results you can find the term "growth in constant currency". Example:
Infosys is expected to report 2-3 per cent sequential rise in revenue growth in constant currency (CC) terms on Friday

Read more at:
//economictimes.indiatimes.com/articleshow/70158444.cms"

It will be stupid to be constantly changing base rates.

Question still stands. Rupee dropped to seventy and has since hovered in the mid to high 60s as the RBI bought dollars stabilise the exchange rate.

Did our economy contract by 40% odd ? or how much would you say it has since contracted due to a weaker rupee if at all.

The same question applies in the opposite direction too if the rupee were to suddenly appreciate.

THAT is the point i'm trying to raise.

 

[abhi1984]

Question still stands. Rupee dropped to seventy and has since hovered in the mid to high 60s as the RBI bought dollars stabilise the exchange rate.

Did our economy contract by 40% odd ? or how much would you say it has since contracted due to a weaker rupee if at all.

The same question applies in the opposite direction too if the rupee were to suddenly appreciate.

THAT is the point i'm trying to raise.

You are banging on the same question which has been answered. If it is not clear - search for the term "constant currency" growth or constant dollar GDP.

 

[6pack]

Dollar denomination doesn't work like that. Mostly it is in constant currency terms i.e. a particular rate is used as a base and then used to calculate. If you look at Infosys, TCS etc results you can find the term "growth in constant currency". Example:
Infosys is expected to report 2-3 per cent sequential rise in revenue growth in constant currency (CC) terms on Friday

I read this simple explanation of constant currency

Constant Currencies Definition

Constant currencies are exchange rates used by international companies to eliminate the effects of foreign currency fluctuations in financial statements.

www.investopedia.com

Looks like another way for management to twist real numbers to show profit to investors even when they are making loss however small it may be. Interesting.

 

[abhi1984]

I read this simple explanation of constant currency

Constant Currencies Definition

Constant currencies are exchange rates used by international companies to eliminate the effects of foreign currency fluctuations in financial statements.

www.investopedia.com

Looks like another way for management to twist real numbers to show profit to investors even when they are making loss however small it may be. Interesting.

It goes both ways. If you look at Infosys numbers above constant currency is at 2-3% while growth is at 7-8%. So net they are making a profit due to currency fluctuations which could be for many reasons.

The other time currency growth might be completely subdued due to inaccurate hedging or adverse effects. In effect the company might be really growing but rates are not in their favour.