A budget is a formal statement of estimated income and expenses based on future plans and objectives. In other words, a budget is a document that management makes to estimate the revenues and expenses for an upcoming period based on their goals for the business.
The Union Budget of India also referred to as the Annual Financial Statement in Article 112 of the Constitution of India, is the annual budget of the Republic of India. The Government presents it on the first day of February before the beginning of the new financial year in April. Until 2016 it was presented on the last working day of February by the Finance Minister of India in Parliament. The budget, which is presented by means of the Finance bill and the Appropriation bill has to be passed by Lok Sabha before it can come into effect on April 1, the start of India’s financial year.
Union Budget 2019 has many Interesting facts with its own Pros & Cons. For the first time in history, the Union Budget was presented by First full-time Women Finance minister of India Nirmala Sitharaman. Every time we see Budget is kept in a Briefcase for the first time is wrapped in Red colored Cloth with State Emblem of India to be called Bahi-Khata by the Ministry of Finance.
In the interim budget exemption for people earning up to Rs.5 Lakhs p.a. so there was a hope that slab would increase up to 8 Lakhs but union budget 2019 appears to be a different thing. And current effective slabs are 5% tax on Income between 2.5 Lakhs to 5.0 lakhs, 20% tax on Income between 5.0 lakhs to 10 lakhs and 30% on income above 10 lakhs. This Budget does not bring a smile on faces of Lower and Middle-class people but also does not put a burden on them but for the Higher class rate has been increased. Every time the Budget is presented everyone wants to know what will become cheaper and what will be cost more to their pocket, let us have a look at this:-
Following is a list of items that will become costlier and cheaper:
What will become Costlier?
- Petrol and Diesel
- Metal Fittings
- Auto Parts
- Cashew Kernels
- CCTV Cameras
- Cigarettes, Hookah, and Chewing Tobacco
- Fully-Imported Cars
- Split Air-Conditioners
- Digital Video Recorders
- Imported Books
- Imported Plastics
- Raw Materials For Soap Manufacture
- Vinyl Flooring And Tiles
- Optical Fibres
- Ceramic Tiles And Wall Tiles
- Imported Stainless Steel Products
- Newsprint And Paper For Newspaper And Magazines
- Marble Slabs
- Mountings For Furniture
What will become Cheaper?
- Electric Vehicles
- Electric Vehicle Components
- Electronic Appliances
- Mobile Phones Chargers
- Set Top Box
- Import Of Defence Equipment
The Budget is presented by the Now Finance Minister Ms. Nirmala Sitharaman. In her speech of 2 Hours 14 Minutes longest ever in the History, she discussed major Highlights which are as follows:-
- The government has cut the fiscal deficit target to 3.3 percent of GDP in 1 2019-20 instead of 3.4 percent of GDP envisioned earlier.
- The government will allocate Rs 70,000 crore for PSU bank recapitalization this financial year.
- The government cut the corporate tax rate to 25 percent for nearly all companies.
- The government said there will be a two percent tax deduction at source (TDS) on cash withdrawals exceeding Rs 1 crore, in a year, if done from one bank account.
- It was also announced that Rs 100 lakh crore would be invested in the infrastructure sector over the next five years while highlighting the need for public-private partnerships to ensure delivery of projects.
- The government has proposed to increase the minimum public shareholding 6 to 35 percent from 25 percent.
- The government increased the import duty on gold and precious metals to 12.5 percent from the earlier 10 percent.
- Inter-changeability of PAN and Aadhar for ease and convenience of taxpayers so that Income Tax return can be filed using Aadhar Number also.
- Surcharge for individuals having taxable income from Rs 2 crore to Rs 5 crore increased to 25 %.
- Surcharge for individuals having taxable income from Rs 5 crore to Rs 10 crore increased to 37 %.
- Lower GST Rate from 12% to 5% on Electric vehicle and Additional Income Tax Deduction of 2.5 Lakhs on Interest paid on loan taken to purchase an electric vehicle.
The focus of the government is on FDI (foreign direct investment) in Aviation, Media and Finance sector. In the corporate sector, the companies up to turnover of Rs.400 corers have to pay 25% corporate tax earlier which was Rs.250 corer. Also, a surcharge (additional tax) of Rs.1 levied on Petrol & Diesel. Talking about GST the Taxpayers having an annual turnover of less than Rs. 5 corers can now file quarterly returns.
Let us now study a breakdown of how the government earns. For every ₹1 that Government earns:
- 21 PAISE comes from Corporation Tax
- 20 PAISE comes from Borrowings & Liabilities
- 19 PAISE comes from GST & other Taxes
- 16 PAISE comes from Income Tax
- 09 PAISE comes from Non-Tax Revenue
- 08 PAISE comes from Excise Duty
- 04 PAISE comes from Customs
- 03 PAISE comes from Non-debt capital Receipts
The main allegation made on budget 2019 is it does not tell how the amount of money will be invested and in which sector because the meaning of budget is only to show how much amount of money will be invested in different-different sectors and what is the future estimated income of government. We can have a look at key highlights to cover whole Union Budget 2019:-
- Vision for $5 trillion economies.
- Transforming rural lives
- Enhancing ease of direct and indirect taxation
- New Jal Shakti Mantralaya to ensure Har Ghar Jal
- Strengthening connectivity Infrastructure
- Improving India’s space abilities.