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*Yet other headline budget but to disappointment*





*Yet other headline budget but to disappointment*

As in past this budget is announced to make newspaper headlines. The budget doesn’t seem to give actual benefits.

1.     No outright tax exemption up to 5 lakhs but instead rebate has been increased from Rs. 2,500 to Rs. 12,500. This means that person having total income exceeding 5 lacs would not get any relief. His tax slab would remain at 2.50 lakhs only.

2.     Other announcement which the government made on increase in tax exemption on bank interest, upon analyzing the finance bill, it has come to light that this limit increase from Rs. 10,000 to Rs. 40,000 is only for purposes of tax deduction by bank. The interest in excess of Rs. 10,000 continues to remain taxed.

3.     Also tax on notional rent has now been exempted in respect on two self-occupied houses but the benefit of interest on loans on these two houses collectively has been kept same at Rs. 2 lakhs. Which means that deduction of interest per home has effectively been reduced from Rs. 2 lakhs to 1 lakhs where person invests in two houses.

4.     Benefit of sale of house property and option to buy two houses to save capital gains tax have been given only once during the life time of taxpayer and that too where the capital gains does not exceed Rs. 2 crores. Since most of the parents possess very old ancestral properties and this government has also changed the Cost inflation index base year from 1981 to 2001 and jump in real estate prices most of the cases are bound to have capital gains more than Rs. 2 crores. There comes no actual relief to taxpayers. 

5.     As far as measure to incentivise the farmers is concerned we feel this sector certainly needs encouragement in terms of subsidies and higher MSPs. But the government had announced interest subvention scheme of 2% in interest rates and 3% in case of timely payment of loans. This means no exemption but the burden to that extent shall be shared by the government. Giving better price to the farmers for their produce was better option. The method of calculate cost for 1.5 MSP remains the confusion at present. 

6.     Along with this, government has announced a yearly Rs. 6,000 income assurance to farmers having land less than 2 hectares. This puts additional burden of Rs. 75,000 crores on the government of India. This amount means almost 2 months collection of Central GST going into that scheme. When the country is struggling with fund crises, such burden would further make situations worst. Also during such high inflation mere Rs. 6,000 for 365 days would not make much difference. Instead this will be big reason for demotivation. 

7.     Apart from these two sectors there had been no real announcements which would have increased employment or dealt with problems of poverty and increasing dissatisfaction in minds of the people. 

All in all we feel that this budget is pure #VoteBank budget to make highlights with no actual relief flowing to the people at large. Once again reading the Finance Bill 2019 in between the lines was a huge disappointment.

*Regards*
*CA. Keshav R Garg*
*98880-90008*

Comments

  1. Credeb Advisors8 February 2022 at 06:02

    Hi, Thank you for sharing the information. credeb advisors are the best CA in Delhi provides all chartered accounting services in budget friendly accounting companies in Delhi

    ReplyDelete

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