Union Budget 2019-20 will be presented on 1st February 2019 by the Finance Minister Arun Jaitley. This will be the sixth and last budget presentation by the ruling government before the 2019 Lok Sabha elections which are due in the month of April-May 2019. It is that time of the year when the investors across India will be glued to their television or mobile sets and tracking every word of the Finance Minister. If history is anything to go by, then it is important to note that the benchmark indices have dropped considerably eight out of ten times ahead of the budget month. However, the situation is very different this time. The investors are expecting a revision in the income tax slabs, an increased investment in various sectors like real-estate, agriculture, automobile and slew of other incentives for the businesses.
Here is what the markets and Investors expect from budget 2019 in India:
Income Tax Slab Revision
This is one of the most important expectations of the general public or investors from the 2019 union budget. This time the budget likely brings some cheers to the investors as there are reports that the Finance Minister may double the income tax exemption limit from the present Rs. 250000 to Rs. 5, 000,00. Presently, the income up to Rs 2.5 lakh is exempt from the income tax. Income between Rs. 2.5 – 5 lakhs attracts 5% tax, Rs 5-10 lakh is taxed at 20% and income above Rs. 10 lakh is levied with 30% tax. The corporate industry also has budget 2019 India expectations that the corporate tax rate might get reduced to 25% from the present 30%.
Removal of LTCG Tax
The introduction of the Long Term Capital Gains (LTCG) tax in the Union Budget 2018 was a major let down for the investors as well as the stock market. The LTCG tax basically means imposing a tax on the profits generated from various assets such as mutual funds, bonds, shares, real estate, etc. The investors are required to pay 10% tax on the profit exceeding Rs 1 lakh by selling any assets. The major disadvantage of the LTCG tax is that it reduces the overall profits from the sale of the assets. The Union Budget 2019 expectations of the investors with regard to the LTCG are that they want the government to do away with this tax. However, the chances are quite unlikely that the government may abolish this tax, which was introduced only last year.
Abolition of the Angel Tax for the Startup Companies
A lot has been debated on the issue of the angel tax, especially for the startup companies in India. An angel tax is essentially a 30.9% tax, which is levied on the investments made by the external investors (angel funding) in the startup companies. It was started by in the Union Budget 2012 by then Finance Minister Pranab Mukherjee. A large percentage of the startups in India expect the government to abolish angel tax from the Union Budget 2019-20 and provide much-needed relaxation to the companies.
Farm Loan Interest Waiver for Farmers
Many political parties woo the farmers by waiving of their loans. However, in the 2019 Union Budget, it may not be possible to waive off the entire loan of the farmers, but the government may come up with an alternative solution. In the budget 2019 India expectations, it is believed that the Finance Minister may announce the far loan interest waiver for the farmers provided they pay off their loan amount on time. There are also the reports that the government may also come up with a new scheme called ‘One Household One Incentive’ plan where they may deposit Rs. 10,000 annually in the bank accounts of the farmers so that they do not face any difficulty when it comes to purchasing the seeds, fertilizers, machines and so on. If this happens, then the farmers may procure more fertilizers or agricultural machinery and this will eventually lead to the rise in the shares of the fertilizer and machinery manufacturing companies.
Reform in GST Structure
There is no denying to the fact that the government has taken some measures to provide relief to the people by reducing the Goods and Service Tax (GST) on some goods but it is also expected that the government may announce a slew of reforms further in GST. The Prime Minister Narendra Modi, in a recent interview, indicated that the government will continue to bring major reforms in the GST structure. Furthermore, there are indications from the Finance Minister Arun Jaitley that they may do away with the 28% slab except on some luxury goods. There are expectations that the government may announce something good about the GST in the interim budget of 2019.
Infrastructure Status to Real Estate in India
The expectation of the real estate sector in India from the Union Budget 2019 is extremely high this time. There are expectations that the government may give the infrastructure status to the real estate sector as this will be extremely beneficial in many ways. This will go a long way in bringing down the interest rates on home loans, project costs and most importantly make homes affordable for everyone. Keeping into the account the ambitious plan of the government “Housing for all by 2022”, the government may come up some extreme measures to get the real estate sector in India back on track. Moreover, the home buyers expect that the GST rate on home purchases to reduce from the current 12%.
Lowering GST Rate on Electric Vehicles in India
The electric vehicle industry in India is making rapid strides in India and growing at a considerable rate. The auto industry in India is expecting a lot from the 2019 Union Budget. The industry is hopeful that the government with its objective of lowering the emission levels in the country and improving growth of the electric vehicles may lower GST on the same from the current 12%. There are also the talks that the government may come up with some measures or plan in the budget to scrap those commercial vehicles that do not adhere with the emission norms if operational for more than 15 years.
So, we all are hopeful that the budget 2019 India expectations of every individual and different sector in India are fulfilled