Income Rax Return: Experts welcome Budget 2019, say government tried to cover all
Individual taxpayers will get tax rebate of up to Rs 5 lakhs and will not be required to pay any income tax.
While presenting Budget 2019, interim Finance Minister Piyush Goyal said, "Because of major tax reforms undertaken by us during last four and half years, both tax collections as well as tax base have shown significant increase, achieving a moderate taxation- high compliance regime. It is, therefore, just and fair that some benefits from the tax reforms must also be passed on to the middle class taxpayers."
With this, a host of announcements were made. Drum-rolls please!
1. Individual taxpayers will get tax rebate of up to Rs 5 lakhs and will not be required to pay any income tax.
2. For salaried persons, Standard Deduction is being raised from the current Rs.40,000 to Rs.50,000.
3. Tax Deduction at Source (TDS) threshold on interest earned on bank/post office deposits has been proposed to be raised from Rs.10,000 to Rs.40,000.
4. TDS threshold for deduction of tax on rent has also been proposed to be increased from Rs.1,80,000 to Rs.2,40,000 for providing relief to small taxpayers.
According to FM, this will provide tax benefit of Rs.18,500 crore to an estimated 3 crore middle class taxpayers comprising self employed, small business, small traders, salary earners, pensioners and senior citizens.
Let's find out what analysts have believe about these major reforms.
Gaurav Gupta, Co-founder and CEO, MyLoanCare.in:
Budget 2019 was an opportunity for the government to provide the much-needed relief deserving sections of the society and it lived up to the expectations by rolling out many such measures in today’s budget. The tax payers finally earned praise and reward of their contribution to nation building as the government increased the income tax exemption limit to Rs 5 lakh and an increase in standard deduction limit.
Shailendra Kumar, Director & CIO, Narnolia Financial Advisors Ltd:
Budget announced today was an exercise by the government to improve the fortunes in the forthcoming general election. In the short term, the stimulus of ninety three thousand crores to salaried employees and farmers means a boost to consumption but much needed infra and capex spending continue on the backseat. Budget estimate on the revenue front appears unconvincing. Though one should not take a full financial year view on the basis of this budget as policies of the new government post general election in May would finally decide how government finances look when we end the coming financial year FY19-20.
Raising the income tax exemption limit to rupees five lakhs will help three crore taxpayers and would cost about rupees eighteen thousand crores to the exchequer. This surely is a strong positive measure for lower income group and urban youth population in their early career.
— Zee Business (@ZeeBusiness) February 1, 2019
Ramratthinam S – CEO, Muthoot Homefin (India) Limited:
The disposable income of EWS and LIG category borrower will increase with the exemption of tax on annual earnings upto Rs. 5 lakh and also increase in standard deduction by Rs. 10,000. The developers for new projects are also incentivise with the Income Tax exemption available till 2020 thereby keeping the prices in check.
Mustafa Nadeem, CEO, Epic Research:
A taxpayers budget with political undertone stands to change the scenario for consumption based stocks. Slab change with no Tax for people earning up to 5 lac + 1.5Lac investment*, Secondly no TDS on income from Post office deposit up to 40000 and on rental income up to 240000 per year are great benefits along with that no tax on second house and increase in the standard deduction limit from 40k to 50K are welcome moves.
So, to sum it all these are those factors that are going to bring in a lot of liquidity to the market in terms of investment. The high impact of this is to be seen on consumption-based stocks.
Raj Kumar, Whole Time Director & Chief Executive Officer at LIC Mutual Fund:
The budget is positive for consumption & rural economy. We don’t see anything major negative on fiscal Tax compliance will also improve due higher slabs & ease which government is aiming at & lots of money is being given to the tax payers by giving various benefits on direct taxes like increasing the threshold to 5 lacs, increasing the standard deduction by addition 10 thousand, tax rebate on notional income from second home & minimum support of Rs 6000 to Farmers. All these measures will fuel consumption & increase the top line of companies.
However there is slippage in fiscal deficit & likely increase in borrowings may have bearing on bond market.
Raghvendra Nath, MD at Ladderup Wealth Management:
In this budget, government has tried to cover all the people, especially farmers who were in a lot of distress and discontent, so by announcing an assured income for farmers would help to take a sting out of their distress. This has been one of the biggest benefits. Then the cosmetic change in the income tax slab from Rs 2.5lakh to Rs 5lakh will send a positive message to the middle-class voters. As the finance minister mentioned there are almost 3 crore voters in middle class category. Hence, a large pool of people would be getting a benefit of Rs 10,000 to Rs 12,000 which is going to be a major benefit to them.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.