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All Interim Budget 2019 predictions at one place

Updated on: 23 Nov, 2023 01:22 AM

Budget 2019, being the constant headlines these days has grabbed the attention of all!! Union Budget coming each year is very important because it is outlooked as a mode of major reliefs being announced to masses. For the year 2019, it's even more awaited being the last and interim budget of ruling NDA government. As being a constitutional practice the government who has Lok Sabha elections ahead in the fiscal year only proposes a budget for the part of the year known as an interim budget. A lot of expectations are being drawn from the proposed Interim Budget 2019. It is being said the government might even break the tradition and present a full union Budget. Well, it would be interesting to see how things turn out to be. For now, let us have a glimpse of the predictions made by Tax2win experts for Budget 2019, the last under the current flagship of Modi Government.

  • Increase in the Basic Exemption Limit
    Basic exemption limit for individuals who are aged below 60 years likely is likely to be increased. It is expected the rise shall take the new basic exemption limit to Rs 3 lakhs in comparison to Rs 2.5 lakh currently. Which will help in giving tax relief to middle-class tax filers. Income Tax exemption limit for the individual aged 60 years & above but upto 80 years is likely to be increased to Rs 3.5 lakh (from 3 lakh currently). For those aged 80 years & above the Income Tax basic exemption limits likely to be increased to Rs 5.5 lakh, from the existing threshold of Rs 5 lakh.
  • Decrease in the Income Tax Slab Rates
    It is expected from budget 2019 to make pronouncements in respect of lowering the income tax slab rates as under To bring down tax rate to 25% from 30% at present for the highest slab. The 20% slab must be bought down to 15% This would be a welcoming step by the government to support the inflow of earning in hands of citizens.
  • Income Tax Slab Increment
    With the decrease in slab rates, there are also expectations that the highest slab limit is increased. Presently above Rs, 10 Lakhs tax at 30% is charged. This limit of 10 Lakh shall be increased to Rs 20 Lakhs keeping in view the economic pace and inflation rates.
  • Rebate u/s 87A
    One possible change can be done in the Rebate u/s 87A. Rebate u/s 87A may likely to be increased to Rs. 5,000 again. The current limit is upto Rs 2,500 but in earlier years it has touched the ceiling of Rs 5000 so it quite expected that rebate is restored to the level of its highest till date. Further, it can be anticipated that the amount upto which rebate can be claimed is extended to Rs. 5,00,000 from the current limit of Rs 3,50,000.
  • Section 80C
    Every time budget is announced people expect a lot from slabs and 80C. This being very talked about the budget we can get to see the increase in 80C limit upto Rs 2,00,000 form the existing Rs 1,50,000. This will also incentivize savings amongst the tax filers.
  • Housing Loan Benefits
    It is expected to give more benefit on housing loan. Currently, the interest amount paid on such loans can be set off upto Rs 2,00,000. The budget can pave a welcoming step in increasing this limit up to Rs 2,50,000- Rs. 3,00,000. Further, in case of let out property, this limit can be increased to Rs. 3 lakh so as to give increased benefit to home buyers. And also promote housing for all initiative of the government.
  • Section 80D
    Under this section of Income Tax Act, 1961 tax deduction is allowed for the premium paid towards Medical policies. The current benefit allowed is upto Rs 25,000 for those aged below 60 years. It is expected that benefit of premium paid towards medical insurance to be increased to Rs 30,000 from the current 25000.
  • 80TTB
    In last Budget 2018, interest deduction benefit upto Rs 50,000 was given to the senior citizens. From the Interim Budget 2019, it is quite expected to give the benefit to other citizens (i.e. those aged below 60 years) on the same lines of 80TTB.
  • NPS
    The Deduction U/S 80CCD 1(B) are likely to be increased. Government is constantly promoting investments in NPS, and we hope that the same legacy will continue in this budget too. The limit is expected to increase from current Rs. 50,000 to 75,000 in near future.
  • Deduction U/S 80DDB
    Deduction in respect of specified diseases are likely to be made at an equal level. Currently, Rs 1,00,000 benefit is allowed for those aged 60 and above. For others, the limit is restricted upto Rs 40,000. From Budget 2019 it is expected that the limit of Rs 1,00,000 is made at par for all age groups.
  • 44AD
    Under section 44AD currently, the income required to be shown is at least 6%. Provide the amount has been received through banking channels. It is expected that this minimum requirement is further reduced to 5%.
  • 44ADA
    Under this section minimum, 50% income of the total income is required to be reported. The same is anticipated to be reduced to 40%.
  • 80GG
    Deduction benefit for the rent paid is currently provided to the extent of Rs 5,000 pm. The same can be increased probably upto Rs 10,000 in the upcoming budget announcement.
  • Standard Deduction
    The limit of standard deduction to salaried individuals can exceed form its current threshold of Rs 40,000 to 45,000 or 50,000.
  • Transport & Medical Allowance
    There is also an outright possibility that the medical or transport allowances which have been subsumed in standard deduction are brought back into the force.
  • Metro Cities
    Currently, in India, we have four metro cities namely, Mumbai, Chennai, Delhi and Kolkata There are foreseeable chances that more cities can be added in metro criteria like Hyderabad, and Bangalore etc.
  • Section 44AE
    Presently, the tax filer cannot have more than 10 vehicles. The limit of 10 vehicles is supposed to be increased up to 15 vehicles. Further, the calculation of income under this section is currently being done at Rs 7,500 per vehicle. The same can be increased up to Rs 10,000 per vehicle.
  • House Rent Allowance (HRA)
    For HRA calculation special benefit is provided to metro cities. I.e those residing in metro cities can claim HRA upto 50% of salary. For others, the criteria is restricted to 40%. It is foreseen that the limit of 50% will be introduced for all cities equally whether metro or others. One other condition is that HRA benefit is restricted to 10% of basic + DA. This 10% may be further decreased to 5% so as to give the higher benefit of HRA exemption to citizens.
  • Children education allowance
    Currently, exemption is allowed up to Rs 100 p.m for 2 children. It can be predicted keeping in view the inflation these limits will be made realistic now. And, the exemption can be increased up to 1,000/- p.m. for every child.
  • Children hostel allowance
    Exemption up to Rs 300 p.m. for 2 children is allowed presently. With pronouncements in budget 2019 we expect it to increase up to 2,000 p.m. for every child.
  • Infrastructure Bonds
    We are of the opinion that government might reintroduce the infrastructure bonds. This will serve the manifold benefit of promoting investment, tax saving and procuring funds for the government.
  • Preventive health checkup
    People tend to directly or indirectly spend a significant amount on health these days. But are not able to claim any good tax benefit on the same if they are not paying health insurance premiums Although provisions for benefit upto Rs 5000 has been made u/s 80D in name of Preventive health Checkup but it is quite minimal. The budget 2091 should extend this limit up to Rs 10,000.
  • Section 80TTA
    The NDA government has taken major steps towards digitalization and e-money transactions. As a result of which it can be anticipated that the limit u/s 80TTA shall stand increased post this budget announcements. Currently, interest upto Rs 10000/- is tax exempt which can be increased to 15000/-.
  • Section 80E
    Education loan is a boon for the students has also helped their parents save taxes. It is expected that the duration for which this tax benefit is being currently claimed can be increased by the government u/s 80E. The current limit is of 8 years which can be extended upto 15 Years.
  • Bitcoin Taxation
    With bitcoins grabbing everyone’s attention we can expect them to get a mention in the upcoming budget too.
  • TDS on FDR
    Presently 10% TDS on bank FDs is being deducted. The same might cut short to 5%.
  • Section 194IB
    As per the existing provision of section 194IB there is ambiguity in respect of its interpretation. The point of conflict arises when the tenancy was vacated in the previous year with a partial period of stay in last month. In such scenario what shall be the amount of TDS u/s 194IB? As in that case, the amount from which TDS needs to be deducted would be less than the TDS amount which is to be deducted & deposited. Which will further lead to loss to the treasury and defeat the purpose of the law. Hence, in this budget, a clarification should come on this issue.
  • NPS Withdrawal exemption
    Presently 40% of the corpus on withdrawal of NPS is tax-free. It is possible that in Budget 2019 the limit is made 60%. The notification in respect has already been issued but the same awaits to be made effective. And our team is hopeful that it would be done y this interim budget.
  • Change in Fiscal Year
    The government has already made the budget date advance by one month. It is quite expected that the fiscal year of India is made at par with the calendar year and international standards. I.e. it should range from Jan to Dec. A budget just before elections can have a huge impact on the voting results. So, will the government in its transitional phase break all its trends and present a complete populistic budget or will again focus on agricultural and industrial sectors to boost economic growth in the long run.
CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.