No tax liability if your income is up to Rs 9.5 lakh, but conditions apply

Standard deduction has also been raised from Rs 40,000 to Rs 50,000, besides a host of tax benefits to home buyers

Budget 2019: Stressing that tax concessions have been provided with a view to help poor and middle-class people living on a tight budget, Finance Minister Piyush Goyal on Tuesday said that now individuals earning up to Rs 9.5 lakh can escape liability by taking advantage of saving schemes.

Replying to the debate on the Finance Bill in Lok Sabha, the Minister said he did not propose any change in the tax rate but only provided few rebates which will boost spending and help the economy. The Finance Bill, which contains tax proposals, was passed by the Lok Sabha with a voice vote, completing the budgetary process in the lower house.

In a swipe at the Congress, the Minister said that unlike the previous UPA dispensation, the present Modi government in the interim budget did not reduce levies of SUVs which are used by rich persons.In the Finance Bill 2019, the Minister proposed to raise tax rebate for people having annual income up to Rs 5 lakh from Rs 2,500 to Rs 12,500, which will effectively ensure that they don’t have to pay any tax. In the Bill, standard deduction has also been raised from Rs 40,000 to Rs 50,000, besides a host of tax benefits to home buyers….Read More

Why PM Modi seems to have given up on hopes of transforming India

Modi’s promise of a new political economy, one oriented around the private sector, productivity and growth was illusory

Budget 2019 Highlights: India’s Prime Minister Narendra Modi is in a spot of trouble. He has to face reelection in a few months amid growing dissatisfaction with his government’s performance; he’s likely to use every lever available to eke out a win. One such lever, unfortunately, was the interim federal budget that his lame-duck government presented last week, to keep official machinery running till the next government can come in with a mandate and make decisions about taxation and spending. As many of us feared, Modi broke with bipartisan convention: He used the occasion essentially to launch his election appeal to India’s voters. And, unfortunately, it’s one that they have heard before.

The big news in the interim budget was that Modi intended to give smallholders a small annual income to supplement their earnings. Many other countries support their farmers similarly; India, in fact, uses a complex system of agricultural subsidies that is both inefficient and, arguably, breaches World Trade Organization rules. But, Modi’s intent in introducing the scheme at the very last moment — in fact, past the very last moment — isn’t to reform agricultural policy; he’s clearly hoping to address his rising unpopularity in rural areas. To some degree, his hand was forced: The main opposition Congress Party had announced plans for a minimum income guarantee just a few days earlier.

Modi didn’t stop there; he had a bunch of other goodies in the budget to throw to undecided voters, including a tax cut for low earners. As a consequence, the government won’t make its fiscal deficit target for the financial year and shifted its target for the next year by an even greater margin. The worst part is that there isn’t really any great crisis that would justify breaching fiscal rules, only electoral considerations…Read More

Tax benefits for above Rs 5 lakh income group may be considered next: Goyal

As the nation is moving towards formalisation, the tax base and revenues are also increasing, says Piyush Goyal

Interim Budget 2019: Finance Minister Piyush Goyal expressed confidence that the Narendra Modi government would return to power in the upcoming general elections, and that it might look at tax relaxations for individuals earning more than Rs 5 lakh annually in the full Budget for 2019-20. Edited excerpts from Goyal’s post-Budget press conference: You said that in the main Budget, you would further look at the income tax rate slabs.

I hope that the next government under the leadership of Prime Minister Narendra Modi will look at other tax proposals in the main Budget. That would be the job of the finance minister then. I have been constrained by the nature of interim Budget. However, there are many things that could not have waited till the final Budget, particularly relief for small taxpayers, which I have passed on. The rest is for the next FM to decide in July. Anyway, if you see the track record of this government, for five years consistently, we have passed on many benefits to taxpayers. If a person’s taxable income is Rs 8 lakh, would tax benefits be according to the present slabs?

Yes. Keeping the convention of interim Budget in mind, we have not touched the tax slabs, and the existing slabs will continue. For only those with taxable income below Rs 5 lakh, we have announced a measure in the interim Budget.

Do we have a new fiscal road map in place?

A lot of economic growth has not been captured in the GDP numbers that came out earlier. As the nation is moving towards formalisation, the tax base and revenues are also increasing. Probably that has taken some time to reflect in the (GDP) numbers. As the calculation is getting robust and given the new numbers just came out, fiscal consolidation may not change much. When we calculate with the new estimates, we have done better than the original road map.

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BUDGET SESSION : RAFALE JETS WILL STRENGTHEN OUR AIR FORCE, SAYS KOVIND

The Budget session is expected to be a stormy one, with Lok Sabha elections just around the corner. Catch LIVE updates on Budget 2019 session

Interim Budget 2019: The Budget session of Parliament began on Thursday, a day before the Interim Budget 2019 will be presented by Finance Minister Piyush Goyal.

With the Lok Sabha elections around the corner, this year’s Budget session is expected to be a stormy one. The Budget session began with President Ram Nath Kovind addressing a joint session of Parliament. The President said, “India was going through “uncertain times” ahead of the 2014 Lok Sabha polls and the Narendra Modi government after assuming power resolved to work towards a ‘New India’, giving hope to the people.”

He said the NDA government has been trying to pass the triple talaq bill to empower Muslim women so that they can live a life without fear. The government has been working to fulfil hopes and aspirations of all sections of people, he said. Highlighting the government’s achievements and various welfare schemes, Kovind said 21 crore poor people were covered under the PM’s life insurance scheme, while over 2 crore households got power connection as part of the PM’s Saubhagya scheme.

EVENT HIGHLIGHTS

• President Ram Nath Kovind leaves for Rashtrapati Bhawan.
• After decades, Indian Air Force will use ultramodern Rafale aircraft in coming months: Kovind
• President Ram Nath Kovind concludes his speech.
• President Kovind said, “6.8 crore Indians are filing income tax returns”
• Kovind says India is world’s second largest manufacturer of mobile phones
• Under Jan Dhan Yojana, 34 crore people have opened a bank account, said Kovind
• GST is a long-term policy and is a boon for the business sector. The taxpayers in the country trust this government: Kovin To enhance the opportunites for high-level professional education, govt is setting up news educational institutions

 Read full source: Budget Session 2019 

India doesn’t need a bold Budget now, populist spending should be avoided

All prime ministers before him have respected the tradition of treating the last budget before elections as just a way to keep the government going for a few months. Modi should too

BS| On Feb. 1 in India, Prime Minister Narendra Modi’s government will present its last federal budget before general elections are held in a few months. Unlike most other budgets, this typically isn’t a high-octane affair; governments are discouraged from locking their successors into any new spending or taxes. An “interim” budget, as it’s called, tries to avoid committing spending for the entire financial year, which begins from April.

But, Modi’s finance minister seems ready to break with that requirement. Politicians from India’s ruling Bharatiya Janata Party insist that there’s no legal requirement to present just a vote-on-account. And the reason’s obvious: They want to pack in as many big-ticket, populist announcements as they can before the election campaign formally begins and governments are forbidden to make new promises outside party manifestos.

Interim Budget 2019 While Modi doesn’t exactly have his back against the wall in his re-election campaign, he won’t be feeling entirely comfortable either. A round of state elections towards the end of last year saw the BJP lose control of three crucial North Indian states — in the very region that propelled him to his landslide victory in the last parliamentary elections in 2014.

The truth is that Modi doesn’t have very many seats to lose. His majority in the lower house of Parliament is both unprecedented by Indian standards and, nevertheless, razor thin. He won 282 seats out of 543 in 2014, and has lost several in by-elections since. A dip in the prime minister’s popularity doesn’t need to be significant for him to lose his majority. And if he has to try and craft a coalition, he may wind up being vulnerable to leadership challenges from within his party…

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Interim Budget 2019: What’s in store for investors, taxpayers, economy?

From doling out sops for the farm sector and providing some relief to the individual income-tax payers, here’s what leading brokerages expect from the budget

Interim Budget 2019: With barely a few days left for the NDA (National Democratic Alliance) government to present the Interim Budget 2019, most domestic and foreign brokerages expect the measures to have a populist undertone ahead of the general elections scheduled for April / May 2019. From doling out sops for the farm sector and providing some relief to the individual income-tax payers, here’s what leading brokerages expect.

CLSA

The pressure to further expand the farmer welfare programme ahead of the 2019 national elections is high for PM Modi. A possible announcement of a nationwide direct farmer support scheme is quite likely, or possibly even earlier. A Telangana-style scheme could cost ~ Rs1.2trn, further complicating fiscal maths, as it could be a recurring liability. The RBI’s possible large dividend might help just one time.

The GST-led tax revenue shortfall of 75-80bps of GDP is not reflected in the reduced government expenditure for FY19 due to off-balance-sheet funding, which is not a sustainable solution and will create its own problems later and distort the reported fiscal deficit for FY19…

Bank of America Merrill Lynch

We expect the Center to target a fiscal deficit of 3.5% of GDP in FY20, after ending FY19 at 3.7%, 40bp higher than target. This should be funded by running down the Center’s surplus with the RBI without additional issuance. While a pre-election Budget should ideally not propose new direct taxes, the finance minister should take steps to alleviate stress in rural India (metaphorically Bharat) via subvention or direct income transfer and for small industries via subvention…

Contain Source by Business Standard or BS

What 2019 Budget can do to help India clean its air, reduce coal addiction

Addressing policy issues are important if India is to fulfill its commitment to the Paris Climate Agreement 2015 to install 175 giga watt (GW)

Interim Budget 2019: India has one of the world’s largest programmes to expand renewables–a doubling of capacity over the next four years–but India’s ambitious 2022 target of generating enough non-coal energy to replace the equivalent of 175 coal-powered plants is veering off track

On February 1, 2019, the ruling Bharatiya Janata Party (BJP) has a chance to get things back on track, help India reduce its addiction to coal, help clean the country’s air and meet the global climate-change commitments of the world’s fourth-fastest growing carbon polluter

After record growth in the installed capacity of renewables over the four years to 2017, capacity addition slowed down in 2018. The main reasons: an anti-dumping duty imposed by the government on imported solar modules to aid domestic manufacturing, higher rates of taxation under the goods and service tax (GST) and unclear policy. So, the last budget before 2019 general elections is of particular significance to the renewables sector, which comprises electricity from solar, wind, hydro and bio power.

These are the issues the budget must contend with:

• Due to a 2018 slowdown, the government will have to install 3.5 times more capacity every month than its average speed for the last four years.
• A new duty on imported solar modules–which meet more than 80% of the country’s need–increased production costs and threaten the competitiveness of solar tariffs against those of coal.
• Higher GST rates on solar modules and services are driving away investors and manufacturers. Delays in a long-term policy to remove uncertainty from the sector is holding back new investment.

Why the renewables budget is important

Addressing policy issues are important if India is to fulfill its commitment to the Paris Climate Agreement 2015 to install 175 giga watt (GW)–a GW is 1000 mega watt (MW)–of renewables power capacity by 2022. This is enough to replace 175 coal-fired power plants of 1,000 MW each and reduce India’s dependence on fossil fuels.

Contain Source by Business Standard or BS

Explainer: What is an interim budget? What FM Jaitley can and cannot do

This will be the last Budget of the current BJP-led NDA government before the 2019 General Elections

Interim Budget 2019: With just a few months left before the Narendra Modi government formally completes its tenure, Finance Minister Arun Jaitley will present NDA regime’s first interim budget on February 1, 2019.

As this will be the ruling BJP government’s last budget before the upcoming Lok Sabha elections, here’s an explanation of what an interim budget actually means.

What is an interim budget?

An interim budget is presented by a government which is going through a transition period or is in its last year in office ahead of the general elections. Traditionally, an incumbent government cannot present a full-fledged Union Budget in the election year. Instead, the Finance Minister presents an interim budget during the joint sitting of Rajya Sabha and Lok Sabha in the Parliament, the livemint reported.

With an interim budget, the incumbent government seeks a vote of approval from the Parliament to draw money from the Consolidated Fund of India to meet its budget expenses before the end of the financial year, i.e; March 31st, 2019. It is a traditional practice which takes place in the run-up to every general election, according to an India Today report.

The full-fledged Union Budget is presented by the newly-elected government after Lok Sabha polls. In recent times, interim budgets have been instrumental for the incumbent governments to list out their achievements to draw voters’ support.

What can be done?

An interim budget is similar to a Union Budget. In interim-budget, the ruling government tables estimate of its expenditure, revenue, fiscal deficit and financial performance and projections for the upcoming financial year. The ruling government at the end of its tenure, presents an interim budget for three to four months so as to keep the country running unhampered. The likely focus of the incumbent government in the interim budget can be to outline its economic vision for the next five years if it may remain in power, said the livemint article…

Contain By: Business Standard

Interim Budget 2019: Will Jaitley double I-T exemption limit to Rs 5 lakh?

The Union Budget will precede the unveiling of the Direct Tax Code Report on February 28

Interim Budget 2019: The 2019 interim budget on February 1 is likely to bring some good news for taxpayers. Ahead of 2019 Lok Sabha elections, Finance Minister Arun Jaitley may double the income tax (I-T) exemption threshold for the salaried taxpayers from the present Rs 250,000 to Rs 500,000, according to an IANS report.

With financial apathy on the rise after demonetisation drive, this pre-poll sop tactic by the PM Narendra Modi-led government is expected to benefit the middle-class segment of the society. FM Jaitley may also reinstate a tax-free status for medical expenses and transport allowance.

The demand to double the I-T exemption limit to Rs 500,000 was made by the Confederation of Indian Industry (CII) as one of its pre-Budget recommendations. The industry has also sought an increase in the deduction under Section 80C to Rs 250,000 to incentivise savings.

As the ruling BJP government is trying to outline its economic policy vision to remain in power, it would be interesting to see how these major changes could be made in the interim budget or vote-on-account budget, considering that not too many policy changes should be made….

Contain Source: Business Standard or BS

To bridge fiscal deficit, RBI likely to pay govt $5.8 bn interim dividend

The dividend could help Prime Minister Narendra Modi’s administration bridge a widening budget deficit following a drop in tax collections

Interim Budget 2019: The Reserve Bank of India (RBI), having changed management last month following a clash with the government, is likely to transfer an interim dividend of Rs 300-400 billion ($4.32 billion-$5.8 billion) to the government by March, according to three sources with direct knowledge of the matter.

The dividend could help Prime Minister Narendra Modi’s administration bridge a widening budget deficit following a drop in tax collections, and would come after the government pushed the RBI for the additional funds ahead of a national election due by May.

Read Source: Business Standard or BS

Former finance ministry official Shaktikanta Das was appointed as the new governor of the Reserve Bank of India (RBI), following resignation of Urjit Patel last month amid tensions over the dividend payout and other issues.The government and RBI have now appointed a panel to look into the issue around the sharing of the RBI’s reserves.

“We are absolutely sure that an interim dividend of more than 300 billion rupees would be paid before March end,” one of the sources told Reuters.The RBI did not respond to an email seeking comment, while the Finance Ministry declined to comment.

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