Tax For Wealthy, Focus On Poor: Nirmala Sitharaman's Budget In 10 Points

In major changes for commodities such as gold and fuel, the government impose additional duty and cess of Rs 2 per litre on petrol and diesel

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Nirmala Sitharaman said the fiscal deficit for this year would be trimmed to 3.3% of the GDP

Finance Minister Nirmala Sitharaman raised taxes for the super-rich and hiked duties on fuel, gold and automobile parts in her first Budget on Friday, in measures aimed at tackling a five-year low in growth while tightening fiscal consolidation. To restart investment, Prime Minister Narendra Modi's government also eased FDI in the insurance and aviation sectors, tightly controlled for decades, and reduced taxes for corporates. After his spectacular re-election, PM Modi aims at making India a $5 trillion economy by 2024-25. But the government did not announce a big jump in public spending despite expectations. Nirmala Sitharaman said the fiscal deficit for this year would be trimmed to 3.3 per cent of the GDP.
Here are 10 major announcements made in the Budget 2019:
  1. The fiscal deficit target was revised to 3.3 per cent for 2019-20 from 3.4 per cent, a move which came as a surprise for some economists who had expected the target to be eased further.
  2. The government will ease foreign direct investment (FDI) restrictions in single-brand retail, open up FDI in sectors such as aviation, insurance, media and animation, and allow foreign investors to buy debt of listed real estate investment trusts (REITs).
  3. Proposing to increase the surcharge on the super-rich, the Finance Minister said the effective tax rates for individuals with a taxable income of Rs 2 crore-Rs 5 crore and over Rs 5 crore would be hiked by around 3 and 7 per cent.
  4. Companies with an annual turnover of Rs 400 crore will be under the 25 per cent tax bracket. That would leave only 0.7 per cent of companies outside the 25 per cent corporate tax rate.
  5. Income tax returns can be filed using either Aadhaar card or PAN card, a move widely expected to strengthen the taxpayer base and improve tax collection.
  6. NRIs may get Aadhaar cards on arrival without the mandatory waiting period, by showing their Indian passport. NRIs currently need to have spent 180 days to be eligible for an Aadhaar card.
  7. Ms Sitharaman proposed a health sector outlay of Rs 62,659.12 crore for the current financial year - the highest in the last two financial years - with Rs 6,400 crore earmarked for the centre's flagship health insurance scheme, Ayushman Bharat. The government allocated Rs. 400 crore to create "World Class Institutions" in the field of education - an over three-fold increase compared to the revised estimates for 2018-19.
  8. Gold and fuel are costlier: An additional duty and cess of Rs 2 will be added to the cost of petrol and diesel per litre. Import duty on precious metals such as gold has been raised to 12.5 per cent from 10 per cent.
  9. The government promised electricity and clean cooking facilities to all rural families by 2022. It also It said 1.25 lakh kilometres of roads will be upgraded in next five years at an estimated cost of Rs 80,000 crore.
  10. Maintaining status quo on income tax slabs and rates, the government allowed an additional deduction of up to Rs 1.5 lakh against interest paid on loans taken by March 31, 2020 to buy houses worth up to Rs 45 lakh. The government said the move will lead to a benefit of around Rs 7 lakh to middle class home-buyers over 15 years.




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Highlights

1
Fiscal deficit target revised to 3.3% of GDP for 2019-20, from 3.4%
2
Government eases foreign direct investment restrictions in select sectors
3
Individuals with taxable income above Rs 2 crore to pay higher surcharge

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