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Finity Weekly Update (Issue #17): How does the interim budget impact you and more

  • Nirav Karkera
  • Feb 02 2019
  • 2 minutes
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Voters want conflicting things. They want a lot of government expenditure, but they don’t want higher taxes.

— Bruce Rauner

The interim budget 2019 invited quite a euphoria in the parliament as the NDA-led government presented a bouquet of sops to almost every section of the society – the farmers, military, MSMEs, film-makers and yes, the middle-class of India.

The budget was no less than a classic election budget where expenses were read out with compassion and doubts on sources of revenue were brushed under the carpet. But, that’s the beauty of democracy – the larger public of the economy does not understand public economics.

The comprehensive highlights are already doing rounds in the press and social media, but here I would like to present the top five highlights that would probably matter the most – at least from a personal finance perspective.

Interim Budget 2019 Highlight

How does it impact you?

Increased standard deduction You can claim an additional INR 10,000 as a deduction from your income
Increased income tax rebate Indians earning up to INR 5 Lakh do not need to pay income tax; utilizing 80C investment limits – INR 6.5 Lakh p.a. becomes non-taxable
TDS limit hiked – post-office savings scheme No TDS till interest earned on post office savings exceed INR 40,000 p.a. (previous INR 10,000)
Scope for tax exemption on notional rent expanded You can now own a second home without paying tax on notional rent
Increase in gratuity limit Gratuity can be earned up to INR 20 Lakh (previous: INR 10 Lakh)

 

Most expected an increase in the section 80C limit and/or a roll-back of the LTCG tax on equities introduced in the previous budget. However, expecting the government to cut taxes mostly paid by the rich – especially during the election season was too wishful at best.

While there was no relief specifically for equity investors, the week has seen quite a run-up – especially as it approached the interim budget day.

Nifty information

While the interim budget made the day a tad bit exciting, the announcements should be taken with a pinch of salt. At least till the post-election full budget continues the line of thought.

If you have any concern, please write to us at ask@finity.in or call at +918048039999, we would be happy to answer your query.

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