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Budget 2019 analysis: These are the hits and misses

Budget 2019 analysis: These are the hits and misses

Budget 2019 analysis: These are the hits and misses
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By Parizad Sirwalla  Feb 4, 2019 6:34:37 AM IST (Updated)

The interim finance minister Piyush Goyal presented a populist budget today.

The interim finance minister Piyush Goyal presented a populist budget today. With the aim of catapulting the nation into a $5 trillion economy in the next five years, the finance minister laid down the 10 dimensions of the growth story for India.

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Acknowledging the contribution of the middle class and salaried tax payer to nation building, various tax benefits have been introduced for them. Taxpayers with taxable income up to Rs 5 lakh would not be paying taxes now on account of the enhanced rebate. For taxpayers holding more than one self-occupied house property, notional rent on second house property would not be taxable. Standard deduction has been raised from Rs 40,000 to Rs 50,000 for salaried taxpayers.
A once-in-a-lifetime benefit of rollover of long-term gain on sale of residential property has been introduced for investment made in two residential houses if the gain is below Rs 2 crore.  Enhancing the threshold for tax deducted at source (TDS) on interest from banks and post office deposits to Rs 40,000 and on rental payments to Rs 2,40,000 annually will bring relief again for middle class taxpayers.
Anti-tax abuse moves like demonetisation have increased tax filing base by 1.06 crore and also anti-black money laws have got Rs 1.30 lakh crore additionally into the tax net.
The government continues to focus on use of technology to simplify overall tax process.  Measures like processing of tax return and refund in one day and fully automated e-asseements are steps in that directions.
Overall, interim-budget 2019 is a welcome move from the government.
Hits
  1. Taxable income up to Rs 5 lakh pay no taxes.
  2. Standard deduction raised from Rs 40,000 to Rs 50,000.
  3. Second self-occupied house not to be notionally taxed.
  4. No TDS required to be deducted if the amount of rent paid is Rs 2.4 lakh per year (earlier Rs 1.8 lakh).
  5. Once-in-a-lifetime benefit of rollover of long-term gain on sale of property for investment made in two residential houses where capital gains are up to Rs 2 crore.
  6. 99.54 percent of all returns filed last year were accepted without any scrutiny.
  7. Measures like demonetisation increased tax filing base by 1.06 crore
  8. Anti-black money measured brings 130 crore into the tax net.
  9. Misses
    1. Existing tax rates to continue.
    2. Deduction u/s 80C remains unchanged.
    3. Parizad Sirwalla is partner and head, Global Mobility Services — Tax, KPMG in India.
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