Archive for ‘annual budget’

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01/02/2019

2019 Budget Summary: Middle class gets tax relief, farmers get cash support in election budget

2019 Budget Summary: Finance minister Piyush Goyal announced relief in income tax and proposed a Rs 75,000-crore fund for assured income of around 12 crore farmers.

BUDGET Updated: Feb 01, 2019 16:40 IST

HT Correspondent
HT Correspondent
Hindustan Times, New Delhi
Budget 2019,Piyush Goyal,Income Tax
Finance Minister Piyush Goyal during his budget speech in the Lok Sabha on Friday.(Photo: Twitter/@ANI)

Finance Minister Piyush Goyal rolled out the government’s last budget ahead of this year’s national elections, announcing no tax on income up to Rs 5 lakh, a Rs 75,000 crore assured income scheme for small farmers and a mega pension scheme for workers in the unorganised sector. The initiatives are designed to woo the middle class, address farm distress and boost private investment in an effort to shore up the political base of ruling BJP-led national coalition that has been accused by the opposition of not delivering on its promises to the poor.

“India is solidly back on track and marching towards growth and prosperity,” Piyush Goyal said early in his budget speech, asserting that the government had succeeded in “we have broken the back of back-breaking inflation”.

He said the Narendra Modi government’s success in controlling inflation had put more money in the hands of people. “Inflation is a hidden and unfair tax, from 10.1 per cent during 2009-14,” he said.

Goyal announced exemption from tax on income of up to Rs 5 lakh per annum, which goes up to Rs 6.5 lakh if the individual tax payers invest Rs 1.5 lakh in provident fund and prescribed equities. He also proposed to increase the standard deduction from the existing Rs 40,000 to Rs 50,000. The proposal will benefit 3 crore middle class tax payers.

The TDS (tax deduction at source) threshold on interest from bank, post office deposits has been raised from Rs 10,000 to Rs 40,000. The finance minister further proposed to increase the TDS threshold on rental income from Rs 1.8 lakh to Rs 2.4 lakh.

The BJP-led ruling National Democratic Alliance (NDA) is facing discontent over depressed farm incomes and doubts over whether his policies are creating enough jobs. The interim budget allocates Rs 600 billion for a rural jobs programme and Rs 190 billion for building of roads in the rural areas.

Goyal said Rs 6,000 per year assured income support will be given to small and marginal farmers having less than two hectares of land. He announced a new fund, ‘Pradhan Mantri Kisan Samman Nidhi’ for disbursement of cash to “vulnerable farmers”.

Around 12 crore farmers will receive Rs 6,000 per annum under the PM Kisan scheme. The money will be transferred into bank accounts of farmers in three equal instalments. The finance minister said Rs 20,000 crore have been provided for current fiscal, 2018-19 under PM Kisan scheme.

The government proposed to set up a national commission, the Rashtriya Kamdhenu Aayog with the initial capital of Rs 500 crore for the welfare of cows. “Happy to announce setting up of Rashtriya Kamdhenu Aayog. Government will never step back from protection of the Gau Mata,” said Goyal.

The government unveiled a mega pension scheme for the unorganised sector workers with an aim to benefit 10 crore people. Goyal said the beneficiaries will get assured monthly pension of Rs 3,000 after reaching the age of 60 years.

“We are launching Pradhan Mantri Shram Yogi Mandhan today. The scheme will provide assured monthly pension of Rs 3,000, with contribution of 100 rupees per month, for workers in unorganised sector after 60 years of age,” Goyal said.

The fiscal deficit would be 3.4 per cent of gross domestic product (GDP), slightly higher than the targeted 3.3 percent, said Goyal, who presented the budget as Union minister Arun Jaitley is undergoing medical treatment in the United States.

Goyal told the Lok Sabha that direct tax collections increased from Rs 6.38 lakh crore in year 2013-14 to almost Rs 12 lakh crore this year with a growth of 80 per cent in tax base. The number of income tax returns filed increased from 3.79 crore to 6.85 crore over the same period, he said.

On job creation, the finance minister said, “EPFO shows two crore accounts in two years. This shows formalisation of the economy. When there is such a high growth, jobs are created.” The government is facing sharp criticism from the opposition over a ‘leaked report’ claiming that unemployment rate is at a 45-year high.

The interim budget is likely to be followed by a full one in July after the Lok Sabha elections. The interim budget projected the economic growth for the fiscal year 2019-20 to be around 7.5 per cent.

Source: Hindustan Times

Posted in annual budget, cash support, election budget, farmers, India alert, tax relief, Uncategorized | Leave a Comment »

01/02/2017

India Budget 2017: Promise to boost rural spending – BBC News

India’s government has unveiled its annual budget, with promises to boost rural spending and pull more people out of poverty.

It comes months after the controversial withdrawal of high value banknotes which caused chaos in the economy, hurting farmers and the poor most.

Finance Minister Arun Jaitley allocated funds to bring more irrigation, roads, electricity and sanitation to villages.

Farmers would also have more access to credit, he said.

The government also plans to spend a record $7.09bn (£5.69bn) on a scheme which guarantees every rural household 100 days of work each year.

Overall rural and farm spending would be increased by 24% as part of the government’s plan to double farm incomes over five years, Mr Jaitley added.

Tax plan

The finance minister also revealed plans to halve income tax rates for people earning between 250,000 rupees to 500,000 rupees ($3700; £2945 to $7,400; £5888) annually, which Mr Jaitley said should also encourage more people to pay tax.

“The present burden of taxation is mainly on the taxpayer and the salaried employees who are showing their income correctly,” he told parliament.

“Therefore post-demonetisation, there is a legitimate expectation of this class of people to reduce their burden of taxation. Also an argument is made that if nominal rate of taxation is kept at a lower slab, more people will prefer to come in the tax rate.”It is not clear how many people the move would impact, but India has a long-running problem of collecting income tax.

In 2013, the latest year for which data is available, only 2% of Indians completed a tax return and only 1% paid tax.

Other proposals announced in the budget speech included:Cutting tax rates on small and medium-sized companies

Banning cash transactions for sums above 300,000 rupees ($4440; £3533)

Political funding reforms including a cap on the cash donated to a political party by a single source

Nothing for foreign investors: Analysis by Shilpa Kannan, BBC News, Delhi

Arun Jaitley had to do a balancing act between the need to stimulate India’s growth and ensuring that the country’s spending is under control.

But I’ve been at an event run by one of India’s biggest business groups, the CII, and the mood is one of general disappointment.

The finance minister had promised to gradually bring down corporation tax from 30% to 25% – but he didn’t do it last year and it didn’t happen this year either.

Many here are saying there was nothing in for foreign or domestic investors. They fear a flee of money from India.

‘Bright spot’

India’s economy is expected to grow by 6.5% in the year to March 2017, down from 7.6% the previous financial year, a key economic report revealed ahead of the budget.

However, the country was a “bright spot” in the world economy, Mr Jaitley said, adding that the impact on growth from the government’s cash crackdown would wear off soon.

He said the currency ban was a “a bold and decisive measure” and would leaded to larger GDP, more tax revenues and a cleaner economy.

The dramatic move to scrap 500 ($7.60) and 1,000 rupee notes was intended to crack down on corruption and so-called black money or illegal cash holdings.

But the Economic Survey, released on Tuesday and written by the government’s chief economic adviser, admitted the rupee withdrawal had been bad for economy. in the short term.

Source: India Budget 2017: Promise to boost rural spending – BBC News

Posted in agriculture, annual budget, budget, Economics, farming, India alert | Leave a Comment »

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28/02/2015

What the Budget Means for Regular Indians – India Real Time – WSJ

The Modi government’s budget offered some sops for middle-class tax payers and a series of steps aimed at boosting social security for the country’s poor.

Tax Breaks on Health Insurance, Travel: Individuals will be allowed to deduct up to 25,000 rupees ($400) annually in health-insurance premiums from their taxes. That is an increase from the current 15,000-rupee deduction. For people 60 years or older, the deduction will be 30,000 rupees.

Mr. Jaitley also proposed increasing the amount of transportation expenses individuals can deduct to 1,600 rupees a month, up from 800 rupees a month now.

Pension Deduction: Individuals can now claim an additional tax deduction of up to 50,000 rupees ($800) if they put the money in the government’s New Pension Scheme. “This will enable India to become a pensioned society instead of a pensionless society,” said Mr. Jaitley.

Social Security programs: In a bid to provide a social safety net, Mr. Jaitley said the state will provide accidental death insurance of 200,000 rupees for a premium of just one rupee a month. State insurers will also offer policies covering natural and accidental death for 330 rupees a year.

Though available to all, the relatively small size of the insurance cover implies these will likely be used mostly by the poor.

The government will also encourage individuals to set up pension accounts under a new program. For individuals who open such an account by Dec. 31, the government will match individual contributions up to 1,000 rupees a year, for five years.

Tax-Free bonds:  Mr. Jaitley plans to allow government agencies and others to issue tax-free infrastructure bonds to fund roads, railways and irrigation. Details weren’t disclosed but typically interest on such bonds is tax free.

Service Tax: Now for the bad news: your restaurant and phone bills will soon go up, because the government will raise the service tax to 14% from 12.4%. Individuals indirectly pay this tax on a wide range of services, including on insurance premiums, hotel bills and electricity bills.

Gold Bonds: Since Indians won’t give up their love for gold, Mr. Jaitley tried to come up with ways to at least get it out of people’s homes and into banks. He introduced a plan that he said would make it easier for people keep gold in a bank, earn interest on it and borrow against it.

Mr. Jaitley also proposed a “Sovereign Gold Bond” that would act as an alternate to owning physical gold. These bonds would have a fixed rate of interest and “be redeemable in cash in terms of the face value of the gold,” he said.

Unaccounted-for Money: Mr. Jaitley said the government would introduce more stringent requirements for people to declare assets held overseas and make it harder for people to buy real-estate with cash in an effort to tax evasion.

via What the Budget Means for Regular Indians – India Real Time – WSJ.

Posted in annual budget, Economics, India alert | 1 Comment »

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