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Union Budget 2019

UNION BUDGET 2019 – Pros and Cons..

Nirmala Sitharaman, Finance Minister presented the Union Budget 2019 in the Parliament on Friday, July 5. The budget is the maiden one for FM Sitharaman and first for Narendra Modi government’s second tenure.

Here is a list of pros and cons from the announcement of budget –

FOR BUSINESSMEN

PROS:

  • Corporate tax reduced to 25% for companies with over 400 crores turnover in 2017-18 and easing conditions of set off and carry forward of losses for startups
  • Dispute resolution-cum-amnesty scheme for legacy cases for central indirect taxes like excise and service tax
  • Streamlining multiple labour laws into a set of four codes to ensure standardization

CONS:

  • Levy TDS of 2% on cash withdrawals exceeding ₹1 crore a year from an account with a bank/ post office
  • Low-cost electronic mode of payment without levying any charges will be provided to businesses with turnover exceeding 50 crore. Non-fulfillment of the requirement will result in penalty of ₹5,000 a day
  • Cognisable and non-bailable offence for misuse of export benefits exceeding 50 lakh

FOR INVESTORS

PROS:

  • Entire lump sum withdrawal from national Pension System (NPS) to be exempt from tax, which is limited to 60% of accumulated corpus
  • Exemption from tax for long-term capital gains from sale of house if invested in a startup. Sunset provision or clause extended to 31 March 2019
  • Securities Transaction Tax (STT) on options to be levied on difference between settlement price and strike

CONS:

  • Proposed taxation of 20% on buyback of shares by listed companies after July 5

FOR TAXPAYERS

PROS:

  • Making ‘pre-filled income tax returns’ available to taxpayers
  • Total tax deduction of 3.5 lakh for interest on home loan (home valued up to ₹45 lakh) taken by first-time buyers
  • Faceless e-assessment of tax returns to be launched

CONS:

  • Individuals or Hindu Undivided Families (HUFs) to deduct the tax at source at the rate of 5% on payment made to resident contractors or professionals where the aggregate payments exceed ₹50 lakh during a financial year
  • Surcharge tax rate to 39% for taxpayers with taxable of 2-5 crore, surcharge on taxable income above 5 crore have to pay 42.7% tax
  • Mandatory tax returns filings if income below exemption limit, if annual electricity bill exceeds ₹ 1 lakh and if amount spent on foreign travel exceeds ₹ 2 lakh

FOR CONSUMERS

CONS:

  • Cess and central taxes on petrol and diesel hiked by ₹ 2 per litre
  • Increased customs duty on import of some electronic goods, auto parts and metal fittings to promote Make in India
  • Prices of luxury cars set to rise

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