Here is How #Budget2019 Impacts Your Taxes
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In the present day, every individual is affected by two major tax – GST and Income Tax.
With the General Election a couple of months away, let glance through taxation have evolved with every budget in the last five years and how #budget2019 impacts you.
In 2014, when the NDA government came to power, Finance Minister Arun Jaitely in his maiden Union Budget presentation promised the country to implement the Goods and Service Tax (GST).
The deadline was short and the task was a mammoth. Hence, February 2015, Jaitely pushed the deadline to 1st April 2017.
Even though, the Lok Sabha passed the Constitution Amendment Bill in 2016 paving way for GST. The Opposition, which was led by Congress, sent it to Select Committee of the Rajya Sabha over disagreements.
In August 2016, the upper house cleared the bill and soon after several state-related procedures, the then President of the country, Pranab Mukherjee gave his nod to the amendment.
After the GST council approved the proposed the GST law, by April 2017, both the lower and the upper house of the parliament cleared the bill. On 1st July, GST was implemented all over India.
Since then, the GST law has been amended a lot of times.
Last year in July 2018, the council relaxed the law for service providers with turnover up to INR 20 lakhs exempting them GST registration. While on the side, it also reduced taxes for restaurants to 5 per cent and blocked their access to input credit.
Earlier this month, during the 32nd meeting, the GST council reduced the tax compliance burden on MSMEs by doubling the threshold limit below which companies are exempted from GST to INR 40 lakh.
While addressing the concerns related to revenue loss, Jaitley assured that since “A very large part of GST revenue comes from the formal sector and large companies,” the revenue impact due to these will be minimal.”
Yesterday, the Finance Ministry reported that GST collection has surpassed INR 1 lakh crore in January. This is the third time in this financial year that the GST collection has crossed INR 1 lakh crore.
Announcing the budget 2019, the interim Finance Minister Piyush Goyal said that the GST collection for FY 2019 is roughly around Rs 97,100 crore. He claimed that GST has been continuously reduced resulting in relief of Rs 80,000 crore rupees to the consumers and most items of daily use are now in the 0-5 per cent tax bracket
The ministry has recommended to the council to review the GST tax rate on real estate. While on the other hand, the minister also announced a 2 per cent relief on the interest rate for GST-registered MSMEs.
Coming to direct taxes, the Narendra Modi-led government has been tweaking the personal taxation from time to time. Here is what it looks like
In FY 2014-15’s union budget, the Finance Minister increased personal income tax exemption limit by INR 50,000 i.e. from INR 2 lakh to INR 2.5 lakh for taxpayers below the age of 60 years while for senior citizens, the exemption limit was increased from INR 2.5 lakh to INR 3 lakh.
While the FY 2015-16 didn’t have much for the taxpayers, budget 2016-17 Budget 2016 bought bad news the HNIs with income above INR 1 crore as surcharge was further increased from 12 per cent to 15 per cent.
On the other hand, in 2017-18, Jaitley reduced the tax burden from 10 per cent to five per cent for income between INR 2.5 lakhs to INR 5 lakhs. Additionally, a surcharge of 10 per cent was introduced for income group between INR 50 lakhs to INR 1 crore.
In the last year’s budget, the government didn’t play much with the personal income tax slabs and just introduced a standard deduction of INR 40,000 for salaried class. However, Jaitley also increased the cess from by 1 per cent bringing it to 4 per cent.
Having said that the budget was largely criticized mainly because it had introduced a long-term capital gain tax on equities’ gain at 10 per cent if it exceeded INR 1 lakh in a financial year.
- Budget 2019 Updates:
Talking about the direct taxes, Goyal shared that the government has collected INR 12 lakh crore as taxes, up by 18 per cent in the direct collection in 2017-18. There has been an increase of 80 per cent in IT-returns filed and 1.06 crore people included in the tax base. Also, more than 1 crore people filed IT returns for the first time, after demonetization
The FM announced that all tax scrutiny to be done via anonymous digital interface & tax returns to be processed within 24 hours. No human interference in tax verification and scrutiny in two years. If you are standard deductions, HRA and investments in sec 80, this will also benefit people with higher salaries
The FM also further announced major tax relief to the middle class and salaried class with a taxable annual income of up to INR 5 lakhs will get a full tax rebate. This will provide a major relief of INR 18.5 crore to 3 crore taxpayers. The government also increased standard deduction from INR 40,000 crore to INR 50,000 crore, which would be a further relief of 4700 crores for the taxpayers.
Furthermore, the Goyal announced no tax on notional rent on a second house.