Full Budget 2019-20 Key highlights | Important Tax Proposals

The Indian Finance Minister has tabled today, the Union (Full) Budget 2019-20 in the Parliament. 

Below are some of the key highlights that are related to Personal Finances;

Full Budget 2019-20 Highlights

Latest Income Tax Slab Rates FY 2019-20

Below are the latest Income Tax Slab Rates for FY 2019-20 or AY 2020-21. (FY is Financial Year and AY is Assessment Year)

Increase in Surcharge on individuals with income above Rs 2 cr

In view of rising income levels, a surcharge will be levied on individuals with taxable income of Rs 2 to 5 crore, and Rs 5 cr and above. The effective tax rate for these categories will increase by around 3 percentage points and 7 percentage points, respectively.

Additional Tax Deduction of Rs 1.5 Lakh on Home loans to buy Affordable Property under new Section 80EEA

An additional income tax deduction of up to Rs. 1.5 lakh for interest paid on home loans borrowed during 01-04-2019 to 31-3-2020 has been proposed. This will be available under Section 80EEA. That takes the total deduction to upto Rs 3.5 lakhs (existing Rs 2 lakh limit + Rs 1.5 lakh new proposal). This new Tax deduction is applicable on loan taken to buy a a self-occupied ‘affordable housing property’ only. Properties costing up to Rs 45 lakh are considered as affordable.

Related Article : ‘Budget 2019 – Rs 1.5 lakh Additional Income Tax deduction on affordable home loans | New Section 80EEA‘.

Section 80EEB Income Tax Deduction of Rs 1.5 Lakh on Loan taken to purchase Electronic Vehicle

A new Tax deduction of up to Rs 1.5 lakh has been proposed on Interest paid on Loans taken to purchase Electronic Vehicles.

CPSE ETF to come in ELSS variant

The government will launch its Central Public Sector Enterprises (CPSE) exchange-traded fund (ETF) in a tax-saving mutual fund scheme format like ELSS Mutual Funds. The CPSE ETF is an initiative by the government of India to divest its shareholding in select state-owned companies.

ITR with Prefilled capital gains and expenses

Pre-filled IT returns with capital gains, interest on FDs, so as to reduce time spent on filing Income Tax Returns.

PAN & Aadhaar are Interchangeable

A proposal to make PAN and Aadhaar number interchangeable has been made. This means, if you do not have say PAN number, you can quote your Aadhaar Number in place of it. Also, a proposal to issue Aadhaar to NRIs who are holding an Indian passport has been made.

2% TDS on Cash Withdrawals

TDS of 2% will be levied on Cash Withdrawals of above Rs 1 cr in a year from a Bank Account.

GST Return Filing

Taxpayers whose Annual Turnover is less than Rs 5 crore can file only Quarterly Returns.

Compulsory Filing of Return

The General Budget 2019-20 proposes to make return filing compulsory for persons, who have deposited more than Rs. 1 crore in a current account in a year, or who have expended more than Rs. 2 lakh on foreign travel or more than Rs. 1 lakh on electricity consumption in a year or who fulfills the prescribed conditions, in order to ensure that persons who enter into high value transactions also furnish return of income.

Hike in Import Duty on Gold

Import Duty on Gold and other Precious metals have been hiked to 12.5% from 10%.

Special Excise Duty on Petrol & Diesel

A Special Excise Duty of Re 1 per liter on Petrol and Diesel has been proposed.

New coin series to be launched soon

A new series of coins for Re 1, Rs 2 Rs 5, Rs 10, Rs 20 to be minted so that the visually impaired can easily identify them.

Other Important Proposals :

• To promote cash less economy, business establishments with an annual turnover of Rs 50 crore will have to use BHIM, UPI, Aadhaar Pay, NEFT, RTGS modes of payments and not impose charges or merchant discount rates on customers or merchants. The RBI and banks will absorb these costs.
• e-Assessment : Faceless assessment of tax returns in electronic mode will be launched this year in a phased manner.
• Exemption of long term capital gains realized from selling the house property and investments done in start-ups. This is applicable upto 31^st March, 2021.

Kindly let us know if anything needs to be corrected or updated..

Continue reading :

• All in one guide to ‘Budget 2019 Proposals related to Personal Finance’
• Income Tax Slab Rates for FY 2019-20 / AY 2020-21 | Interim-Budget 2019-20 Key Highlights
• Income Tax Deductions List FY 2019-20 | List of important Income Tax Exemptions for AY 2020-21
• Income Tax Exemption Vs Tax Deduction Vs Tax Rebate Vs TDS | Key Differences
• Latest TDS Rates FY 2019-20 | TDS Rate Table for AY 2020-21

(Post first published on : 05-July-2019)