The common citizen has a number of reasons to cheer Sitharaman’s maiden Budget speech, the underlying message of which was to lay down the road map to make India a $5 trillion economy. While some would argue that Union Budget 2019 failed to meet the expectations regarding changes in income tax slabs, especially considering the thumping mandate the NDA government secured in the recent Lok Sabha polls, there are still certain measures that will benefit the 'aam aadmi' and the 'aam 'aurat'.
That being said, there are a few “bitter pill” decisions that may fail to impress the common people. Here are certain key measures proposed in the Union Budget 2019 that will impact the lives of the common people in the country.
Additional income tax deduction on home loans for affordable housing
In line with government’s “Housing for all by 2022” vision, Sitharaman announced additional income tax deduction of Rs 1.5 lakh on home loans for affordable housing costing less than Rs 45 lakh. The proposal can ensure total tax rebate of up to Rs 3.5 lakh, but only for loans taken during FY19-20. While this a welcome step that can help borrowers save around Rs 7lakh through additional deductions in the first seven years of the loan tenure, the Rs 45 lakh cap on the cost of a house might not impress potential homebuyers in metro cities who witness high real estate prices.
Model tenancy law to be finalized
If buying a home is not on your immediate agenda, the government’s move to bring a Model Tenancy Lawshould cheer you up. Sitharaman, who termed current rental laws “archaic...which do not address lessor-lessee relationship fairly”, said that model tenancy law will be finalized and circulated to states, adding that the government will take steps to promote rental housing across the country.
Measures to boost medium and small enterprises
MSMEs lie at the heart of India’s fundamental development, and understandably FM Sitharaman announced a slew of measures in her maiden Budget speech to boost this critical sector. She announced the Pradhan MantriKaram Yogi MaandhanScheme which will provide pension benefits to about three crore retail traders and small shopkeepers with an annual turnover of less than Rs 1.5 crore. The enrollment process has been kept simple too as participants would only require Aadhaar card, bank account and a self-declaration. In addition, the government allocated Rs 350 crore for FY19-20 for 2% interest subvention on fresh and incremental loans of all GST-registered MSMEs.
Ease of filing income tax among other steps
Sitharaman followed the NDA government’s interim budget promise to provide a full tax rebate to individuals with a net taxable income of up to Rs 5 lakh. Although no further concessions regarding tax slabs were announced, the finance minister declared steps to simplifythe tax filing process including interchangeability of PAN card and Aadhaar card and pre-filling of tax returns. While the former would ensure those who don’t have PAN card to easily file their tax returns with the help of their Aadhaar Cards, the latter would make the filing process way more convenient.
Another interesting announcement was to provide a tax deduction of up to Rs 1.5 lakh on the loan interest to purchase electronic vehicles.
Additionally, in its bid to meet its disinvest goal, the government has offered to launch Exchange Traded Funds (ETFs) that invest in Central Public Sector Enterprises (CPSE)on the lines of Equity Linked Savings Schemes (ELSS). Presently, a tax deduction of up to Rs. 1.5 lakh can be claimed on ELSS investments u/s 80C which come with a 3-year lock-in.
Other positive measures
Some of the other measures that will impress the common man include the introduction of an inter-operable transport card (which can be used to pay for bus travel, parking charges, toll taxes and even to withdraw money), and a consideration to include issuance of Aadhaar card to Non Resident Indians with valid Indian passports without having to wait for the mandatory 180 days period.
Things that may not impress the common man
The proposal to increase the Special Additional Excise Duty and Road and Infrastructure Cess by a rupee each on a litre of petrol and diesel would definitely impact the common man. The proposal to raise customs duty on imported auto spare parts may make certain cars dearer. Also, the raising of import duty on gold and other precious metals for the first time in six years may hurt those looking to buy jewellery in the near future. Lastly, the fact that there wasn’t much proposed to solve India’s job crisis apart from certain steps to boost the startup ecosystem may disappoint some people. However, the finance minister did talk about a new education policy that will comprehensively reform the higher education system and promote research in India.