Union finance minister Nirmala Sitharaman on Friday increased the tax on petrol and diesel raised import duty on gold, levied an additional surcharge on super rich and brought a tax on high-value cash withdrawals as she sought to spur growth with a reduction in corporate tax and sops to the housing sector, startups and electric vehicles.
Presenting the maiden budget of Modi 2.0 government in Lok Sabha, Sitharaman, the first full-time woman Finance Minister, proposed measures to ease liquidity crisis facing shadow banking sector (NBFCs) and providing Rs 70,000 crore capital to public sector banks while seeking to raise additional resources through privatisation of some PSUs.
In a relief to taxpayers, she provided for an additional deduction of Rs 1.5 lakh on interest paid on loans borrowed up to March 31, 2020, on purchase of a house up to Rs 45 lakh.
Corporate tax on companies with turnover of up to Rs 400 crore has been slashed to 25 per cent from the current 30 per cent. Presently, the lower tax rate is applicable to companies having a turnover of up to Rs 250 crore. Sitharaman said the reduced tax rate would cover 99.3 per cent of corporates in the country.
To boost the use of electric vehicles, an additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to purchase EVs has been proposed. Also, the government has asked the GST Council to reduce the tax rate on EVs from 12 percent to 5 percent. Customs duty on certain parts of EVs has been reduced.
In an interview to CNBC-TV18, Manpreet Singh Badal, finance minister of Punjab; Narendra Jadhav, MP, Rajya Sabha and economist; Manish Sisodia, Delhi deputy CM and Tuhin Sinha of BJP gave their take on Sitharaman's union budget 2019 and their outlook on the road ahead.