"No doubt a finance budget used to be a mammoth exercise for its maker (the government); it directly touches the economies on one hand and the heart of the common man on the other! Being the last budget of the tenure of NDA government, I found it rather a pleasant surprise!! Many courageous decisions were observed. Considering the space limitation, let me put a few dashing provisions, recommended by our 1st time Finance Minister, winning the heart of the king of ensuing election."
For the salaried class, standard deduction has been raised from Rs. 40,000 to Rs. 50,000/-. Second home is said to be a dream home for a common man. Hence in the interim budget both his/her houses would be eligible to claim exemption. Now interest on home loan upto 2,00,000 will be allowed as deduction in respect of both the houses. TDS limits on interest on fixed deposit has been enhanced from Rs. 10,000/- to Rs. 40,000/-; this will certainly reduce the workload at posts, banks and financial institutions. Proposals like hiking the tax-free gratuity limit from Rs. 20 lacs to 30 lacs, mega pension scheme ensuring a monthly pay of Rs. 3,000/- to the employees in unorganized sector and inclusion of employees having salary upto Rs. 21,000 in ESIC scheme will certainly give satisfaction to the human resource working day in and day out for the nation.
Biggest relief in the interim budget is through the amendment in Section 87A of the Income tax Act. For the 1st time in the history of India, assessees having business or salary income, upto Rs. 5,00,000 p.a. shall get complete relief paying tax. With the stabilizing GST regime and overseeing at the encouraging number of taxpayers; the government has come forward giving least trouble to the common man.
A relief is also provided to the commoner where he/she would have a long term gain from selling his/her residential house up to Rs. 2,00,00,000/-. The assessee can claim exemption on purchases up to 2 houses within 2 years or construction up to 2 houses within 3 years. Obviously such windfall exemption will be only one time. However what’s more a common man expects from the government?
In view of expediting the process of refund, Income Tax returns are proposed to be processed within 24 hours. Henceforth there won’t be personal interface between the assessees and the tax officers during the scrutiny cases. This will certainly help to curb the malpractices like tax evasion, frauds, false claims, unjust enrichment through refunds, thick skinned bureaucracy and rampant flowing of black money. Readers may take note that all the proposed changes in direct tax will be effective for the financial year 2019-20.
For the real estate lobby, tax on notional income has been extended from 1 year to 2 years. Due to difficulties in assimilating the stringent provisions of RERA, sudden demonetization culminated by confusions in the novice GST system, the builders and developers were grossly perplexed. Piling up of inventory of unsold flats particularly in the metros and suburban areas was a big headache in this sector. However now it may get a sigh of relief because of this welcome provision. Being a populist decision, it may be even extended by our next government! The lobby is also pacified by extending the tax incentive u/s 80IBA of the Income Tax Act.
For the first time after many months, Goods & Service Tax collection crossed the long time desired amount of Rs. 1,00,000 crore. It may be due to a reflection of efficient implementation of e-way bill system. The small entrepreneurs having turnover less than Rs. 5,00,00,000/- can now file their returns quarterly. Cross references were also observed during the budget speech, focusing ease of doing business like simplification of GST Return, flexibility in issuing debit/ credit notes, Expansion of the scope of input tax credit, facilitating multiple registrations in one state. Small service providers having turnover less than Rs. 50 lacs can also now reap the benefit of composition scheme.
In a nutshell budget has tried to address the reported problems of farmers, MEMEs, employees and retirees. The proposals are already aired. Farm loan waivers and direct fund transfer of Rs. 6,000 to small farmers would certainly heal the wounds of genuine producers. However from the economic perspective, it would lead to burden Rs. 75,000 crores on our economy. We have an issue of implementation at ground level. Now we would not be surprised if the greedy large farm growers raise a picture ostensibly showing them as small to reap the desired benefit. Let’s see, whether NDA government at its fag end can successfully meet the cup and the lip without slip for our better tomorrow!