On 5th July, Finance Minister Nirmala Sitharaman presented the Union Budget for FY 2019-20. Overall, the budget was all about to spur growth and give boost to the country’s economy.
Among key announcements, 100% FDI in insurance sector along with easing FDI norms for aviation and media, banking reforms, transportation, promote digital payments, norms to boost affordable housing, ease of investment for FIIS and FPIs, etc.
There is something for almost every sector. Let’s go through the key highlights from the Finance Minister’s Budget speech:
- No change in personal income tax rates.
- 3% surcharge hike on an income of Rs 2 crore; 7% on Rs 5 crore and above.
- Corporate tax with turnover of up to Rs 400 crore slashed to 25 per cent from a current rate of 30 per cent.
- Aadhaar Card can be used for ITR filing for those who don’t have PAN cards.
- Advises GST Council to reduce tax rate on Electronic Vehicles from 12% to 5%.
- Duty has been increased on tiles, vinyl flooring, auto parts, cashew kernels, synthetic rubber, digital and video recorder and CCTV camera.
Finance Minister Nirmala Sitharaman proposes to open Foreign Direct Investment (FDI) in insurance, aviation, media and AVGC (animation, visual effects, gaming and comics). 100% FDI will be permitted for insurance intermediaries, and local sourcing norms will be eased for FDI in single brand retail sector.
- ATM-like One Nation One transport card on various modes of transport (metro, road, railways, etc).
- is planning to create MRO (Manufacturing, Repair and Operate) industry.
- Comprehensive restructuring of National Highways Programme to create National Highways Grid.
- is considering to use rivers for cargo transport that will decongest roads and railways.
- Existing KYC norms for foreign portfolio investment (FPIs) to be more investor-friendly.
- To allow FIIs & FPIs investment in debt securities issued by NBFCs.
- Credit Guarantee Enhancement Corporation to be set up long-term bonds with specific focus on infra sector.
- SEBI to consider about increasing minimum public shareholding from 25% to 35%.
- To review user friendliness of trading platforms for corporate bonds
- One-time 6 month credit guarantee will be provided, on purchase of high-rate pooled assets of NBFC amounting Rs 1 lakh crore in FY’19-20.
- Proposes to provide Rs 70,000 crore capital to PSUs in banking sector.
- RBI will now regulate housing finance companies.
- Fiscal deficit stands at 3.3% of the GDP in FY 19.
- will begin borrowing in foreign currency.
- India’s external debt to GDP is among the lowest in the world.
- Rental laws will be reformed in order to ensure ease in house renting.
- Additional Rs 1.5 lakh tax deduction on home loan upon purchase of home worth up to Rs 45 lakh.
- ‘Study in India’ program to attract foreign students in higher education.
- Rs 400 crore funding for higher education institutions in FY’19-20.
- Launch a new education policy to propose changes in school and higher education.
- National research foundation to promote research in the country.
- More emphasis on new-age skills such as Artificial Intelligence, Internet of Things, Big Data, etc.
- 2% TDS on withdrawals from bank account of Rs 1 crore in a financial year for business payments.
- No charge on digital payments. Businesses with turnover of over 50 crore can’t levy any charges on their customers for cashless payment.