Budget 2019: Finance Minister Nirmala Sitharaman on Friday presented her maiden Union Budget in the Parliament, becoming only the second woman to present the Union Budget in the history of independent India. Starting her Budget speech earlier in the day, Sitharaman emphasised that Budget 2019 is for all and government's approach towards all the programmes is based on 'Gaon, Garib and Kisan' (Village, Poor and Farmer). Though the schemes and policies announced by the current government were aimed at taking India towards becoming a $5 trillion economy by 2025, this Union Budget somehow could not manage to strike the cords with common man. While FM Sitharaman's Budget for the 2019-20 could not live up to the expectation of many, it was the middle class who was left wanting for more.

There were a slew of announcements made by the Finance Minister such as exemptions for taxpayers, reduction in corporate tax and PAN-AADHAAR being alternative options of for filing income tax which came as a relief, but many of them would largely affect the pocket of the common man. Let's have a look at how the Budget tabled by Modi government 2.0 could impact you and your pocket for the next one year.

Income Tax Slabs

Despite a unanimous demand of a higher income tax exemption limit, the government decided to keep the tax slabs for middle and lower income groups unchanged. To add to the disappointment, FM Sitharaman proposed to enhance surcharge of 3 per cent on individuals in higher income group. Citizens with an income between Rs 2 crore and Rs 5 crore will have to pay higher tax. For individuals earning more than Rs 5 crore a year, the applicable surcharge will be 7 per cent.

Justifying the move, the Finance Minister said that those who earn more should pay more taxes to push for better growth of the nation. However, as announced in the Interim Budget 2019-20, lower income groups with an income below Rs 5 lakh will continue to be exempted of paying tax.

Annual TDS on large cash withdrawal

Another hit to the middle-class comes with the announcement of TDS (tax deducted at source) of 2 per cent on cash withdrawal of more than Rs 1 crore from a bank account in a year. The government, however, said that the move is to discourage withdrawals of big amounts of cash and promote digital transactions.

Custom Duty on Gold

FM Sitharaman also announced provisions to hike customs duty on gold, silver and other precious metals in order to mobilise resources. The announcement will lead to a price rise of gold, silver and other precious metals. Customs duty on import of gold has been hiked from the current 10 per cent to 12.5 per cent, thus making gold even costlier.

Home Loans and Electronic Vehicle Loans

Citing a relief to common citizen, Finance Minister announced that those taking home loans will get additional tax deduction of Rs 1.50 lakh on interest paid on home loans taken up to March 2020 for purchase of house up to Rs 45 lakh. Likewise, the Centre will also provide income tax deduction of Rs 1.5 lakh on interest paid on loans taken for purchase of electric vehicles. With this move, government aims become a global hub for manufacturing e-vehicles and also eyes at reducing pollution and carbon emissions.

Rural Development

In the second phase of Pradhan Mantri Aawas Yojna (Gramin), as many as 1.95 crore houses, including amenities such as toilets, LPG and electricity, will be provided to eligible beneficiaries.  Government claims that by 2022, every single rural family except those who are unwilling to take the connection will have electricity and clean cooking facilities.

Women Empowerment

While announcing the Budget, FM Sitharaman also pointed out that the government is going beyond just women-centric policies to build a gender-neutral nation. Amid huge applause in the Lower House, the BJP leader proposed to expand the Women Self Help Group (SHG) Interest Subvention Programme to all districts of the country in order to encourage women entrepreneurship.

PAN-AADHAAR Interchangeability

Sitharaman, while presenting the Union Budget, also stated that PAN and Aadhaar have been made interchangeable, allowing those who do not have PAN to file income tax returns. This means that those who do not have PAN, can now just quote Aadhaar to file tax returns. Making the announcement, Sitharaman said that 120 crore Indians now have Aadhaar. Finance Minister also said that Aadhaar card for NRIs with Indian passports will be issued after their arrival in India, without waiting for the mandatory 180 days.

Education

FM Sitharaman also announced that a new National Educational Policy will be brought in to transform the educational ecosystem in the country. The minister also proposed to bring in major changes in higher education as well as the school system. Foreign students will be invited to the country under the ‘Study In India’ programme and a fund of Rs 400 crore will be allocated for world-class higher education institutions in FY20.