Finance Minister Nirmala Sitharaman presented the Union Budget 2019-20 On 5th July, Overall the budget was all about spurring growth and giving a boost to the country’s economy.
Among key announcements from Budget 2019, 100% FDI in the insurance sector along with easing FDI norms for aviation and media, banking reforms, transportation, promoting digital payments, norms to boost affordable housing, ease of investment for FIIS and FPIs, etc.
There is something for almost every sector. Let’s go through the key highlights from the Finance Minister’s Budget speech:
Taxes
- No change in personal income tax rates.
- 3% surcharge hike on an income of Rs 2 crore; 7% on Rs 5 crore and above.
- Corporate tax with a turnover of up to Rs 400 crore was slashed to 25 percent from a current rate of 30 percent.
- Aadhaar cards can be used for ITR filing for those who don’t have PAN cards.
- Advises GST Council to reduce the tax rate on Electronic Vehicles from 12% to 5%.
- Duty has been increased on tiles, vinyl flooring, auto parts, cashew kernels, synthetic rubber, digital and video recorder, and CCTV camera.
Table Content
FDI
Finance Minister Nirmala Sitharaman proposes to open Foreign Direct Investment (FDI) in insurance, aviation, media and AVGC (animation, visual effects, gaming and comics). 100% FDI will be permitted for insurance intermediaries, and local sourcing norms will be eased for FDI in single-brand retail sector.
Transportation
- In this budget 2019, ATM-like One Nation One transport cards on various modes of transport (metro, road, railways, etc). implemented
- is planning to create MRO (Manufacturing, Repair, and Operating) industry.
- Comprehensive restructuring of the National Highways Programme to create National Highways Grid.
- is considering using rivers for cargo transport that will decongest roads and railways.
Investment
- Existing KYC norms for foreign portfolio investment (FPIs) to be more investor-friendly.
- To allow FIIs & FPIs investment in debt securities issued by NBFCs.
- Credit Guarantee Enhancement Corporation to set up long-term bonds with a specific focus on infra sector.
- SEBI to consider increasing minimum public shareholding from 25% to 35%.
- To review the user-friendliness of trading platforms for corporate bonds
Banking reform
- A guarantee of one time for six months will be provided, on the purchase of high-rate pooled assets of NBFC amounting to Rs 1 lakh crore in FY’19-20.
- Proposes to provide Rs 70,000 crore capital to PSUs in the banking sector.
- RBI will now regulate housing finance companies.
Economy
- The fiscal deficit stands at 3.3% of the GDP in FY 19.
- will begin borrowing in foreign currency.
- India’s external debt to GDP is among the lowest in the world.
Affordable Housing
- The laws for a rental will also be reformed in order to ensure ease in house renting.
- Additional Rs 1.5 lakh tax deduction on home loan upon purchase of home worth up to Rs 45 lakh.
Education
- ‘Study in India’ program to attract foreign students in higher education.
- Rs 400 crore funding for higher education institutions in FY’19-20.
- Launch a new education policy to propose changes in school and higher education.
- National research foundation to promote research in the country.
- More emphasis on new-age skills like
- Artificial Intelligence
- Internet of Things
- Big Data and many more.
Promote Digital Payments
- 2% TDS on withdrawals from the bank account of Rs 1 crore in a financial year for business payments in the budget 2019
- No charge for digital payments. Businesses with a turnover of over 50 crores can’t levy any charges on their customers for cashless payments.