Key Growth Indicators
India’s Vision
Sector wise highlights
Direct Tax
Indian Stamp Act , 1899
Indirect Tax
Prevention of Money-laundering Act, 2002
Key Policy Announcements
Introduction
Mr Vaibhav Jain, a commerce graduate from Sri Guru Gobind Singh College of Commerce (2007) is a qualified Chartered Accountant (2009), Company Secretary (2012), and Law Graduate (2015).
He has successfully qualified 1 year Course for Specialization in the field of Finance, i.e. Masters in Business Finance Certificate Course by ICAI in the year 2010. He has also passed – National Institute of Securities Market’s Certification (NiSM) in Capital Market, Derivatives Market, Depositories, Merchant Banking and Equity Research. He has also done a Certificate Course in Indirect Taxes from ICAI. He has recently qualified as a Registered Valuer in Securities & Financial Assets and was awarded the Certificate of Membership by Insolvency and Bankruptcy Board of India. He was among the First registered Valuer in India. He has also qualified as a specialist in Forensic Accounting & Fraud Detection (FAFD) from ICAI.
He specializes in the field of Valuations, GST Advisory & Assurance, Risk Advisory, Business Strategy and Financial Advisory. He has to his accord very deep business acumen and angle of entrepreneurial and proprietary review. He has a post qualification experience of 8 years in full time practice. He has wide experience in development of systems and control for operational efficiency and effectiveness. He has also designed Management Information and Reporting Systems for many companies.
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Key Growth Indicators
Introduction
- India has taken huge path-breaking leaps to become the fastest growing economy in the world.
- From being the 11th largest economy in the world in 2013 – 14, India is today the 6th largest economy in the world.
‘India Should Walk On Her Own Shadow – we Must Have Our Development Model ‘
-A P J Abdul Kalam
India’s resilience against Inflation
10 %
Average Rate during 2009-2014
4.6%
Current Average rate
Falling Fiscal Deficit
- The fiscal deficit in India has been knocked down to almost 3.4% in 2018-19 RE as compared to the high of 5.6% six years ago. The rate for the current year is expected to fall down to as low as 2.5% of GDP.
- India has managed to achieve the reduction of Fiscal Deficit in spite of increasing the share of the States in central taxes from 32% to 42% in the true spirit of cooperative federalism.
Boosting Foreign Direct Investment
‘ Make In India ‘
- Make India a Global Manufacturing hub
- Facilitate investment
- Foster innovation
- Enhance skill development
- Protect intellectual property & build best in class manufacturing infrastructure.
India’s Vision
Physical & Social Infrastructure
- Ten Trillion Dollar economy thereby providing not only Ease of Business but also with “Ease of Living”
- Next-generation infrastructure of roads, railways, seaports, airports, etc.
- Roof for all with a healthy and wholesome environment
Pollution free nation
- A pollution free nation by changing the mindset to “Don’t be Mean Go Green”
- Making Renewals the major source of supply by shifting towards electric vehicles
- Bringing down the import dependence and ensuring energy security
Clean Rivers
- “Water is life and Clean water means Health”
- Making efficient use of water using micro-irrigation techniques
- Providing safe drinking water to all citizens
Gaganyaan (Orbital Vehicle) Mission
- An indigenous mission that would take Indian astronauts to space by 2022, as a part of Indian Human spaceflight Programme
- India as a launch pad of satellites for the world
Healthy India
- Aiming at a healthy society with a healthy infrastructure
A functional, comprehensive & distress free health care and wellness system with the help of Ayushmaan Bharat Scheme by 2030. - Reduction in the prices of essential medicines, cardiac stents and knee implants, and availability of medicines at affordable prices through Pradhan Mantri Jan Aushadhi Kendras.
Digital India
- Transforming India into a digitally empowered society.
- Spreading of knowledge by reaching every nook and corner of the country.
- Creating a million of jobs in this eco-system with the support of youth
Rural Industrialisation
- Expanding Rural Industrialisation with the help of Make in India approach
- Generating massive employment with the use of modern technologies
- Becoming a global manufacturing hub by developing a root-level structure & mechanism for MSME’s & start-ups
Development of Coastline
- Development of ports & sea-freight industries by scaling up Sagarmala the programme along with inland waterways
- Ensuring better standards & quality of life for people living in coastal areas
Gaganyaan (Orbital Vehicle) Mission
- Focusing on Cold chain along with an integrated approach towards:
I. Agro & Food processing
ii. Preservation & Packaging - Producing food in the most organic way through modern agricultural techniques
Government Governance
- “Minimum Government, Maximum Governance”
- A proactive and responsible bureaucracy which will be viewed as friendly to people by 2030
Sector wise highlights
Agriculture & Allied Sector
Financial Assistance to Farmers
- Doubling the farmers’ income-Increase in Minimum Support Price (MSP) by 50% on 22 Crops
- Strategies proposed for doubling farmers’ income include better seed/hybrids, improved production practices, development of infrastructure & market linkages, & providing institutional credit
Natural Calamities
- Farmers affected by natural calamities will be assisted by Natural Disaster Relief Fund
- 2%Interest Subvention
- 3% additional interest subvention on prompt repayment
Department Of Animal Husbandry
Increase in the allocation for Rashtriya Gokul Mission to 750 crores in the current year.
Budget 2019-20 Announcement
“Rashtriya Kamdhenu Aayog” (National Kamdhenu Commission)
to upscale sustainable genetic up-gradation of cow resources and to enhance production and productivity of cows.
Kisan (Farmers) Credit Card (KCC)
- 2% Interest subvention to farmers pursuing activities of Animal Husbandry and Fishing
- Additional 3% interest Subvention on timely repayment
- Simplified Application Form for KCC to easy and concessional credit.
“Pradhan Mantri Kisan Samman Nidhi”
(Prime Minister Farmers Award Fund Scheme )
- Rs. 6,000 p.a for farmers having 2-hectare land
- Transferred in 3 Instalments
- Applicability: December 2018
Department Of Fisheries
- India is the world’s second-largest producer of fish
- It has an annual growth rate of over 7%
- Providing livelihood to 1.45 crore people at primary level
- For sustained & focused attention towards this sector, a separate
Department of Fisheries is to be created.
Labour and Workers’ dignity
Key Highlights
- Increase in Government’s Contribution from 10% to 14% in New Pension Scheme
- Gratuity exemption enhanced to Rs. 30 Lakh
- The ceiling of ESI’s eligibility cover increased from Rs. 15,000 to Rs. 21,000 p.m
- Honorarium enhanced by 50% for all workers under Anganwadi & Asha Yojana
Pradhan Mantri ShramYogi Mandhan
(Prime Minister Labour’s Salary Scheme)
- The scheme is applicable to workers of unorganized sector with monthly income upto Rs 15,000.
- An assured monthly pension of Rs3,000 from the age of 60 years shall be paid.
- A contribution of Rs 100 p.m. to be made if the worker joins at the age of 29 and in case he joins at 18 years, the contribution is Rs 55 pm
- An amount of Rs500 crore has been allocated for the scheme.
Railway to be safer
- Proposed Capital Support INR 64,587 Crores for fiscal 2019-20.
- The Overall Railways Capital Expenditure Programme 1,58,658 Crores
- Introduction of Indigenously developed and manufactured semi high-speed “Vande Bharat Express”
- All unmanned level crossings in broad gauge railways have been eliminated.
- Meghalaya, Tripura and Mizoram have come on India’s rail map for the first time
Waterways Infrastructure Development
- India Inland waterways developed the first time.
- The flagship programme of Sagarmala along with coastal areas of the country
- First container freight movement from Kolkata to Varanasi
- Introduction of container cargo movement to the North East as well, by improving the navigation capacity of the Brahmaputra river
Defence and National Security
- One Rank One Pension (OROP)
- Substantial hike in Military Service Pay
- Special allowances to Naval and Air Force personnel
- Defence budget allocation over Rs. 3 lakh crore, for the first time.
Strengthening MSME Sector
- Sanctioning of Loans up to Rs. 1crore within 59 minutes.
- 2% interest rebate for GST registered SME units.
- Min. procurement by government enterprises from SMEs
- increased to 25%, out of which 3% from women-owned SMEs.
- GeM (Government e-marketplace) platform.
Reforms in Stamp Duty Act
- Stamp duties would be levied on one instrument relating to one transaction and gets collected at one place through the Stock Exchanges.
- Passing on seamless duty credit to domicile state of buying client.
Payment Of Bonus Act
- Maximum Bonus increased from Rs3,500 pm. to Rs7,000 pm.
- Maximum Pay increased from Rs10,000 pm to Rs21,000 pm.
In the event of death of labourer during service, amount paid by the EPFO increased from Rs2.5 Lakh to Rs6 Lakh
Infrastructure
PRADHAN MANTRI GRAM SADAK YOJANA:
(Prime Minister’s Rural Roads Scheme)
- construction of rural roads tripled
- 15.80 lakh habitations connected with pucca roads
- INR 19000 crores budget allocation for improvement of rural roads
Pradhan Mantri Awas Yojana (Prime Minister’s housing scheme)
1.53 crore houses built in rural areas
Airways Infrastructure Development
- Due to ‘UDAAN Scheme’, ordinary citizens are also travelling by air now
- Number of Operational Airports Crossed 100
- Domestic Passenger Air traffic doubled in the last 5 years.
- Arunachal Pradesh is now on Air Map.
- Inauguration of Pakyong Airport in Sikkim
Others
Anti-corruption
- Transparency in the real estate sector through RERA and Benami Prohibition Act.
- Transparent auction of natural resources including coal and spectrum.
- Fugitive Economic Offenders Act, 2018 to confiscate and dispose of assets of economic offenders.
Swacch Bharat Abhiyan (Clean India Movement)
- From a Government Scheme to a national movement
- A holistic programme which has succeeded in changing the mindset of people.
- 98% Rural sanitation coverage.
- 5.45 lakh villages declared as “open defecation free”.
Youth Empowerment & Job Creation
- PM Kaushal Vikas Yojana.
- Self-employment schemes including MUDRA, Start-up and Stand-up India.
- Today we stand as the 2nd largest Start-up hub across the Globe.
Women led Development
- Ujjwala Yojana aiming to improve the quality of living of women in a rural area
- Free LPG connections
- 70% of beneficiaries of PM MUDRA Yojana are women
- 26-week maternity leave
Direct Tax
Rates of income tax
- No change has been made in the slab rates of Income-tax for individuals, HUF, AOP, BOI, firms and companies.
- Surcharge @10% of tax payable on categories of individuals whose annual
taxable income is between Rs.50 lakhs and Rs.1 crore shall remain the same. - Surcharge @15% for taxable income above Rs.1 crore shall remain the same.
- Health & Education Cess @ 4% will remain same.
Section 50C
Benefit of Rebate of income tax in case of certain individuals – Section 87A
- The existing provisions of Section 87A provide for a rebate of Rs. 2500 from the income tax payable to a resident individual if the total income does not exceed Rs. 350,000.
- The section has been amended to increase the limit of total income available to Individual residents of India from 350,000 to Rs. 500,000 to avail rebate under section 87A of the Income Tax Act,1961 (‘the Act’).
- Hence, rebate under section 87A of the Act has been increased to Rs. 12,500/- as compared to earlier Rs. 2,500/-.
- The change can be explained with the help of following comparative table:-
| Resident Individual | ||
Taxable Income | Tax liability (Pre Budget) | Tax liability (Post Budget) |
2,50,000 | - | - |
3,50,000 | 2,500 | - |
5,00,000 | 12,500 | - |
| 6,00,000 | 32,500 | 32,500 |
| 10,00,000 | 1,12,500 | 1,12,500 |
| Note: Health & Education Cess at 4% shall be in addition to income-tax calculated above | ||
Standard Deduction for salaried person – Section 16
Deduction in Capital Gain – Section 54
- Any long-term capital gains, arising to an Individual or HUF, from the sale of residential house property is exempted to the extent such capital gains are invested in another residential house property. The taxpayer is allowed to invest only in one residential house in India to claim section 54 relief.
- The Finance Bill, 2019 proposes to extend the exemption for the investment made, by way of purchase or construction, in two residential houses provided the amount of capital gains does not exceed Rs. 2 crores. If the assessee exercises this option, he shall not be subsequently entitled to exercise the option for the same or any other assessment year i.e. the assessee can exercise this option only once in a lifetime.
Tax Deducted at Source
Increase in threshold limit for deduction of tax from interest on deposits
Threshold limit for deduction of tax from interest (other than interest from securities) paid or payable by a banking company or Co-operative bank or Post office is proposed to be increased from Rs. 10,000 to Rs. 40,000. From April 1, 2019, the deductor (i.e., banks, post-office, etc.) shall be liable to deduct tax if the interest payable on deposits (i.e., term deposits, recurring deposits, fixed deposits, etc.) exceed the threshold limit specified in below table.
Self-Occupied House Property – Section 23 & 24
- If an individual owns more than one house property for his own residence then only one house property, as per his choice, would be treated as self-occupied and its annual value is deemed as nil. The other house property is deemed to be let-out as per Section 23 and notional rent of such house is taxed under the head ‘House Property’.
- The Finance Bill, 2019 has proposed to amend this provision by allowing an option to the assessee to claim nil annual value in respect of any two houses declared as self-occupied. In other words, a taxpayer can now claim that he has two self-occupied house properties. Consequently, a deduction with respect to interest on borrowed capital can be claimed with respect to both the houses. However, the aggregate monetary limit for the deduction would remain the same, i.e., Rs. 2,00,000.
- Considering the socio-economic need of middle-class families to maintain houses at two locations on account of their job, children’s education, care of parents etc., this Notional rent in respect of unsold inventory will not be charged to tax up to two years instead of one year from the end of the financial year in which certificate of completion is obtained from the competent authority.
- Notional rent in respect of unsold inventory will not be charged to tax up to two years instead of one year from the end of the financial year in which certificate of completion is obtained from the competent authority
Threshold limit if Payee is | ||||
Payer |
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Banking Co. 14% |
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Co-operative Society engaged in banking business |
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Post Office |
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In any other case |
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Increase in threshold limit for deduction of tax from rent
Profit and Gain from Housing Project – Section 80-IBA
Simplification of Direct Tax System to benefit Tax-Payers
- It is proposed that within the next two years, almost all verification and assessment of returns selected for scrutiny will be done electronically through anonymised back office, manned by tax experts and officials, without any personal interface between taxpayers and tax officers.
- Further, it is proposed that income tax returns will be processed in twenty-four hours and refund will be issued simultaneously.
Indian Stamp Act , 1899
As per Section 9A, Transaction in stock exchanges and depositories to duty in case of:
Sale of securities
The stamp-duty on each sale transaction shall be collected on behalf of the State Government by the stock exchange or a clearing corporation authorised by it, from its buyer on the market value of such securities at the time of settlement of transactions.
Transfer of securities
The stamp-duty on transfer shall be collected on behalf of the State Government by the depository from the transferor of such securities on the consideration amount specified therein.
Creation/Change in the records of a depository
The stamp-duty on the allotment list shall be collected on behalf of the State Government by the depository from the issuer of securities on the total market value of the securities.
The instruments referred to above shall be chargeable with duty as provided therein at the rate specified in Schedule I and such instruments need not be stamped.
No duty shall be charged or collected by the State Government on any instrument associated with transactions mentioned above.
As per Section 9B, Transaction in securities other than stock exchanges and depositories to duty in case of :
Issue of Securities
The stamp-duty on each issue shall be payable by the issuer, at the place where its registered office is located, on the total market value of the securities so issued at the rate specified in Schedule I.
Sale or transfer or reissue of securities
The stamp-duty on each sale or transfer or reissue shall be payable by the seller or transferor or issuer, as the case may be, on the consideration amount specified in such instrument at the rate specified in Schedule I.”
Inserted in Article 56
“56A. SECURITY OTHER THAN DEBENTURES | |
(see sections 9A and 9B)–– | |
(a) issue of security other than debenture; | 0.005% |
(b) transfer of security other than debenture on delivery basis; | 0.015% |
(C) transfer of security other than debenture on non-delivery basis; | 0.003% |
| (d) derivatives–– | |
| (i) futures (equity and commodity) | 0.002% |
| (ii) options (equity and commodity) | 0.003% |
| (iii) currency and interest rate derivatives | 0.0001% |
| (iv) other derivatives | 0.002% |
| (e) Government securities | 0% |
| (f) repo on corporate bonds | 0.00001% |
Substituted for Article 27
“27. DEBENTURE—[as defined by section 2 (10A)] | |
(see sections 9A and 9B) | |
(a) in case of issue of debenture; | 0.005% |
(b) in case of transfer and re-issue of debenture. | 0.0001% |
Indirect Tax
Goods & Service Tax
The average monthly tax collection in the current year is Rs. 97,100 crore per month as compared to Rs. 89,700 crore per month in the first year
- GST registered SME units will get 2% interest rebate on incremental loan of 1 Crore.
- Small service providers with a turnover of up to 50 lakhs can now opt for composition scheme and pay GST at 6% instead of 18%.
- Exemptions from GST for small businesses doubled from Rs. 20 lakh to Rs. 40 lakh
- Small businesses having turnover up to Rs. 1.5 crore pay only 1% flat rate and file one annual return only
- Soon, businesses comprising over 90% of GST payers to be allowed to file quarterly return with turnover up to Rs 5 crore.
Custom Duty abolished on 36 Capital Goods
Prevention of Money-laundering Act, 2002
Time limit for attachment of property under PMLA to be hiked from 90 days to 365 days
The Finance Bill, 2019 seeks to amend Section 8(3) of the Prevention of Money-laundering Act, 2002 so as to extend the period of investigation from 90 days to 365 during which the attachment shall remain valid. It also provides that in computing the period of 365 days, the period during which the investigation is stayed by any court shall be excluded.
Key Policy Announcements
FARMERS:
- 12 crore small and marginal farmers to be provided with an assured yearly income of Rs. 6000 per annum under PM-KISAN. Outlay of Rs. 75,000 crore for FY 2019-20 with additional Rs. 20,000 crore in RE 2018-19
- 2% interest subvention to Farmers for Animal husbandry and Fisheries activities; additional 3% in case of timely repayment.
- Interest subvention of 2% during disaster will now be provided for the entire period of reschedulement of loan
LABOUR:
Pradhan Mantri Shram-Yogi Maandhan
- The scheme proposes to benefit the unorganised sector workers such as street vendors, rickshaw pullers, construction workers, rag pickers, agricultural workers, beedi workers, handloom, leather and in numerous other similar occupations.
This pension yojana shall provide them an assured monthly pension of 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age. - A worker joining pension yojana at the age of 29 years will have to contribute only 100 per month till the age of 60 years.
- A worker joining the pension yojana at 18 years, will have to contribute as little as 55 per month only.
- The Government will deposit an equal share in the pension account of the worker every month.
Fiscal Programme
- Fiscal deficit pegged at 3.4% of GDP for 2019-20
- Fiscal deficit brought down to 3.4% in 2018-19 revised estimate from almost 6% seven years ago
- Total expenditure increased by over 13% to Rs.27,84,200 crore in 2019-20 BE
- Capital Expenditure for 2019-20 budgeted estimate at Rs. 3,36,292 crore
Deffence
Defence budget to cross Rs 3,00,000 crore for the first time ever
Entertainment Industry
Indian filmmakers to get access to Single window clearance as well for ease of shooting films
MSME and Traders
- 2% interest subvention on an incremental loan of Rs 1 crore for GST registered SMEs
- At least 3% of the 25% sourcing for the Government undertakings will be from women-owned SMEs
- Renewed Focus on Internal trade; DIPP renamed to Department for Promotion of Industries and Internal trade
Ten dimensions of Vision for India of 2030
India would be a modern, technology-driven, high growth, equitable and transparent society
- To build physical as well as social infrastructure and to provide ease of living
- To create a Digital India, digitize government processes with leaders from youth
- Making India pollution free by leading transport revolution with Electric Vehicles and focus on Renewables
- Expanding rural industrialisation using modern digital technologies to generate massive employment
- Clean Rivers, safe drinking water to all Indians and efficient use of water through micro irrigation
- Besides scaling up of Sagarmala, Coastline and Ocean waters powering India’s development and growth
- Aim at our space programme – Gaganyaan, India becoming the launch-pad of satellites for the World and placing an Indian astronaut into space by 2022
- Making India self-sufficient in food, exporting to the world to meet their food needs and producing food in the most organic way
- A healthy India via Ayushman Bharat with women having equal rights and concern for their safety and empowerment
- Transforming India into a Minimum Government Maximum Governance nation with pro-active and responsible bureaucracy
