On February 1st 2019, the Narendra Modi government introduced its final budget prior to the general election due in May this year.
To save you time on a busy workday, we have shortlisted the top 5 takeaways from the budget that you should know:
1. Income Tax Relief for the Indian Middle Class
- Full tax rebate for annual income up to INR 5 lakhs. Income tax slabs applicable to other individuals will remain the same.
- Standard deduction limit raised from INR 40,000 to INR 50,000. People with an annual income up to INR 6.5 lakhs can benefit from full tax relief if they invest in provident funds, insurance etc.
- Income tax refunds will be processed in 24 hours and released immediately. Additionally, in the next 2 years, the assessment of tax returns will be done electronically.
2. Increase in Fiscal Deficit to 3.4% for FY 2019-20 / Revision in Fiscal Deficit Targets
- The government increased its fiscal deficit target to 3.4% for the year 2019-20. The earlier estimate was 3.1%. The reason stated is the increase in government spending towards income support to farmers.
- The government also revised the fiscal deficit to 3.4% for the current financial year, up from the earlier 3.3%.
- The current account deficit is claimed to be only 2.5% of the GDP this financial year.
3. Government to Launch a National Program on Artificial Intelligence (AI)
- The government has envisaged a futuristic program to promote AI under which a national centre for AI will be developed soon.
- The government has identified 9 priority areas and a national portal on AI will also be launched.
4. Introduction of a Pension Scheme for the Unorganised Sector
- The government announced the ‘Pradhan Mantri Shram Yogi Mandhan’, a national scheme to support the unorganised sector.
- Workers earning up to INR 15000 per month will receive an assured monthly pension of INR 3000 after 60 years of age.
- A worker joining the scheme on attaining 29 years of age or above will have to contribute INR 100 per month while those joining the at the age of 18 will have to contribute INR 55 per month. The scheme is set to benefit 10 crore workers in India.
5. Road Ahead for GST
- The government plans to collect INR 7.61 crore from GST in FY 2019 – 20.
- GST collections for the current financial year are expected to be at INR 6.43 crore; a crore less than what was estimated earlier.
- GST collections in January 2019 crossed INR 1 crore.
What are your thoughts on this year’s budget? Please share with us in the comments section. If you have any queries, please write to us at email@example.com. We will be happy to help you out.
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