-
ALSO READ
Interim Budget 10 takeaways: Cash for farmers, tax break for middle class
Interim Budget 2019: Higher allocations for ROSL to boost textile sector
Interim Budget 2019: Will FM Piyush Goyal surprise the nation tomorrow?
Interim Budget 2019: Total capital outlay for Railways hiked to Rs 1.59 trn
Interim Budget 2019: No major sops but heaps of praise from FM for telecom
The government has touched many lives through multiple social sector schemes in previous years. This year, too, significant measures have been announced for the farm sector, unorganised sector and the middle class — groups who have been most impacted in the past one to two years and needed policy impetus. The Pradhan Mantri Shram-Yogi Maandhan — to provide an assured monthly pension of Rs 3,000 from the age of 60 years to 100 million workers in the unorganised sector — is truly commendable. Combined with Ayushman Bharat, the proposal can uplift the lives of many deprived sections, though details of the scheme will shed more light on likely impact.
The tax-GDP ratio has improved from 9.9 in 2014-15 to 11.9 in 2018-19, arising from an increase in direct tax collections through determined efforts. Revised Estimates for direct tax collections (Rs 12 trillion) show an improvement of Rs 50,000 crore against budgeted numbers. GST collections have been lower than expected but should improve with greater compliance.
The rebate for individual taxpayers with taxable income up to Rs 5 lakh will reduce the burden on middle income taxpayers. Enhancement of standard deduction by Rs 10,000 pre annum would provide additional relief. However, unlike marginal relief provided in the case of surcharge, there is no relief for this rebate to avoid the additional tax liability becoming higher than the additional income.
A positive proposal is the increased TDS threshold for interest earned on bank/post office deposits from Rs 10,000 to Rs 40,000 and for a deduction of tax on rent from Rs 1.8 lakh to Rs 2.4 lakh. Tax exemption to notional rent on a second self-occupied house and one-time benefit of capital gains rollover to investment in two residential houses for a taxpayer having capital gains up to Rs 2 crore are welcome. The realty sector, too, would cheer the extension of exemption on notional rent on unsold inventories from one to two years, although they were demanding complete exemption.
The biggest impact of leveraging technology for reforms implementation is in taxation. If the government is able to bring anonymous and expeditious e-assessments and minimise interface with taxpayers, it could be the next big game-changer after GST.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
