The Union Budget for the financial
year 2019-20 was presented by finance minister Smt. Nirmala Sitharaman in
Parliament on Friday July 5, 2019. The major impact on budget 2019 proposal on
common man is as follows.
- Individual
tax payers with income up to Rs.5 lakh taxable income will get full tax rebate after
permissible deductions under Sections 80C to 80U. However, the super-rich,
i.e., those earning more than Rs 2 crore but less than Rs 5 crore and those
earning more than Rs 5 crore will have to pay higher surcharge.
- A new
section 80EEA in the Income Tax Act is proposed so as to provide a deduction in
respect of interest up to Rs.1.5 lakh on loan taken for residential house
property from any financial institution subject to the following conditions:
(i) Loan has been sanctioned by a
financial institution during the period beginning on the April 1, 2019 to March
31, 2020;
(ii) The stamp duty value of house
property does not exceed Rs.45 lakh;
(iii) Assesse does not own any
residential house property on the date of sanction of loan. This will come up
to enhanced interest reduction of up to Rs.3.5 lakh on loans for self-occupied
properties of affordable homes.
- Income tax
deduction of ₹1.5 lakh on interest on loans taken to purchase electric
vehicles.
- Period of
exemption for capital gains arising from sale of house for investment in
startups to be extended to March 31, 2021.
- Securities
Transaction Tax (STT) will not be levied on the value of the contract but on
the difference between the strike price and market price. It will reduce
effective transaction cost. At present purchaser has to pay STT levied at 0.125
of settlement price in option price exercised and the seller has to pay STT at
the rate of 0.05% on the option premium.
- Telephone
charges including data charges reimbursed by the employer is exempt from tax.
- If you
live in your own house, the HRA received by you is fully taxable.
- Section 80 TTA: Threshold for TDS on interest income from deposits with
banks and post offices increased from Rs.10000/- to 40000/- u/s 80 TTA in the
interim budget 2019.
- Section 80
TTB: From Financial year
2018-19, Senior citizens who have received deposit interest (including SB and Recurring
Deposits interest) up to Rs.50000/- in a financial year are exempted from
tax under Sec.80TTB. However, Senior Citizens whose aggregate annual deposit
interest income exceeds Rs.50,000/- need to pay Income tax only for deposit
interest income over and above Rs.50,000/-. Further, aggregate annual deposit
interest income up to Rs 50,000/- for Senior Citizens is also exempted from TDS
and they need not submit form 15 H for the annual deposit interest income up to Rs.50,000/-.With the introduction of Sec 80 TTB, Sec 80 TTA will not be
applicable to Senior Citizens –ie SB interest exemption of Rs.10, 000/- is
not separately available to senior citizens. Exemption under Section
80 TTA is available to others who are not Senior Citizens.
- Lump-sum
withdrawal of 60 %( earlier 40%) from National Pension scheme is now tax free
at maturity. Increase in deduction towards NPS contribution for all central
government employees to 14% of basic pay from up from 10%
What will be cheaper?
- Buying electrical
vehicles made attractive. GST rate on electric vehicles proposed to be lowered
to 5% from 12%.
- Indigenously
manufactured artificial kidneys (Known as dialyzers) will be cheaper on account
of removal of custom duty on raw materials.
What will be dearer?
- Soap will
be costlier due to Government levying custom duty of 7.5% on palm oil stearin
and other oils having 20% or more free fatty acids and such chemicals.
- Cigarette
and other tobacco items will be costlier, as the Government decided to levy an
excise duty in addition to GST on these products.
- Proposed
to increase custom duty on gold and other precious metals from 10 % to 12.5%.
Buying Gold coins or jewelry will be costlier.
- Special
additional excise duty on fuel of ₹1 per liter. With increase in taxes, the
price of Petrol and Diesel would straightaway increase between Rs.2.30 to
Rs.3.00.
- Duty
raised on Tiles, cashew kernels, vinyl flooring, auto parts, some synthetic
rubber, imported books, digital and video recorder and CCTV camera. House
renovation with Italian marble or upgraded hardware fittings will be costlier.