Summary - Union Budget 2019-20

Explained - Key highlights of Union Budget 2019-20

Key points of Union Budget 2019-2020 :-
  • Ease Local Sourcing Norms for Single Brand Retail :- India’s plans to ease local sourcing rules in single brand retail. The move is aimed at attracting higher foreign investment at a time when global foreign direct investment (FDI) flows have slowed but those coming into India have been robust. 
  • Boost to Electric Vehicles :- The Finance Minister said that :- - The Government has already moved GST council to lower the GST rate on electric vehicles from 12% to 5%.
    - To make electric vehicles affordable to consumers, the Union Budget says the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles.    
  • Increase in fuel prices :-Petrol and diesel prices to rise ₹2 a litre after a Special Excise duty & Road Cess hike by Rs. 1 per litre on petrol and diesel. The government that chose to shore up revenue from oil with no election in sight for months and little fears of crude oil flaring anytime soon. 
  • 35% Minimum Public Shareholding :- Finance minister Nirmala Sitharaman's has proposed to increase the minimum level of public shareholding from 25% to 35% in companies.
  • Investment in CPSE, ETFs get tax deduction :-The budget proposed tax benefits for exchange-traded funds (ETFs) investing in Central Public Sector Enterprises (CPSEs), giving investors in these schemes the benefit of tax deduction on investment up to 1.5 lakh per annum. The move is aimed at ensuring retail investor participation in the government’s disinvestment program, and is likely to increase competition.
  • NRI can invest through FPI :- The budget has proposed the merger of investments made thorough NRI portfolio route with the foreign portfolio investment (FPI). The move will usher the single regime for foreign investors and regulate investments and funds brought in by the non-resident Indians and person of Indian Origin.
  • 70000 crore for PSB to boost credit :-Public Sector Banks are to be further provided Rs 70,000 crore capital to boost credit for a strong impetus to the economy.
  • To further improve ease of living, they will leverage technology, offering online personal loans and doorstep banking, and enabling customers of one Public Sector Bank to access services across all Public Sector Banks.  
  • Change in Duties to boost Make in India :-The budget has proposed a significant changes in basic customs duties to encourage manufacturing in the country. This involves raising customs duties on a number of products, withdrawing exemption from some and lowering rates for others to encourage value addition.
    - Basic Customs Duty increased on cashew kernels, PVC, tiles, auto parts, marble slabs, optical fibre cable, CCTV camera etc.- 5%
    - Basic Custom Duty imposed on imported books.
    - Customs duty reduced on certain raw materials such as: Inputs for artificial kidney and disposable sterilised dialyser and fuels for nuclear power plants etc- Defence equipment not manufactured in India exempted from basic customs duty- Custom duty on gold and other precious metals increased
    The aim is to emerge as an attractive investment destination for companies looking to diversify manufacturing operations from China. The move also intends to give some protection to domestic producers.
  • Digital Payments :-- TDS of 2% on cash withdrawal exceeding Rs. 1 crore in a year from a bank account- Business establishments with annual turnover more than Rs. 50 crore shall offer low cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants.
  • IT Return file:-Aadhaar and PAN may soon be interchangeable, a move that may see UID become the more prevalent ID in the future. The FM on Friday proposed to allow those who don’t have PAN to file income tax returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN
  • Aadhaar to NRI :-Proposal to consider issuing Aadhaar Card for NRIs with Indian Passports on their arrival without waiting for 180 days.
  • About 30 lakh workers joined the Pradhan Mantri Shram Yogi Maandhan Scheme that provides Rs. 3,000 per month as pension on attaining the age of 60 to workers in unorganized and informal sectors.
  • Relief for Start-ups :- Capital gains exemptions from sale of residential house for investment in start-ups extended till FY21.‘Angel tax’ issue resolved- start-ups and investors filing requisite declarations and providing information in their returns not to be subjected to any kind of scrutiny in respect of valuations of share premiums.Funds raised by start-ups to not require scrutiny from Income Tax DepartmentE-verification mechanism for establishing identity of the investor and source of funds.Special administrative arrangements for pending assessments and grievance redressalNo inquiry in such cases by the Assessing Officer without obtaining approval of the supervisory officer.No scrutiny of valuation of shares issued to Category-II Alternative Investment Funds.Relaxation of conditions for carry forward and set off of losses.Pension benefits to about three crore retail traders & small shopkeepers with annual turnover less than Rs. 1.5 crore.
  • MSMEs :-Rs. 350 crore allocated for FY 2019-20 for 2% interest subvention (on fresh or incremental loans) to all GST-registered MSMEs, under the Interest Subvention Scheme for MSMEsPayment platform for MSMEs to be created to enable filing of bills and payment thereof, to eliminate delays in government payments.
  • Inter-operable transport card runs on RuPay card and would allow the holders to pay for bus travel, toll taxes, parking charges, retail shopping.

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