Finance Minister Piyush Goyal. (Picture courtesy: PIB) Photograph:( Others )
Currently, income up to Rs 2.5 lakh for resident individuals (age below 60 years) is exempt from tax
Finance Minister Piyush Goyal on Friday proposed that salaried individuals with an annual income up to 5 lakh will be exempted from paying any tax.
Goyal made the populist announcement while presenting the Interim Budget in the parliament.
Currently, resident individuals with an annual income of up to Rs 2.5 lakh (age below 60 years) are exempted from tax.
Narendra Modi-led government provided tax relief to taxpayers earlier as well. In Budget 2014, the minimum tax-exemption limit was raised from Rs 2 lakh to Rs 2.5 lakh.
The finance minister also raised standard deduction from Rs 40,000 to Rs 50,000.
He also said that individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments in provident funds and prescribed equities.
Sops for farmers
"Under Pradhan Mantri Kisan Samman Nidhi, Rs 6,000 per year for each farmer, in three instalments, to be transferred directly to farmers' bank accounts, for farmers with less than 2 hectares landholding," Goyal said.
"This initiative will benefit 12 crore small and marginal farmers, at an estimated cost of Rs. 75,000 crore, this will enable farmers to earn a respectable living," he said, adding that Rs 20,000 crore would also be added in the revised estimates of this year as well.
The date for the scheme's implementation has been fixed as December 2018. The first instalment will be sent to the farmers in the next few days, the FM added.
In another major sop announced for the agrarian community, the animal husbandry and fisheries farmers will also be provided with the Kisan Credit Card. A 2 per cent interest subvention will be granted, Goyal said, adding that it would be increased to 3 per cent if the repayment is done on time.
In addition to the interest subvention for farmers in the animal husbandry and fisheries sector, the relief measure will also be extended to all among the agrarian class who gets affected by natural calamities.
"In place of rescheduling of crop loans, all farmers severely affected by severe natural calamities will get 2 per cent interest subvention and additional 3 per cent interest subvention upon timely repayment," Goyal announced.
Mega pension scheme
Targeting a huge electorate ahead of the 2019 polls, the finance minister announced a mega pension scheme to provide assured pension of Rs. 3000 rupees per month to nearly 10 crore people working in largely fragmented informal sector.
These informal workers joining the pension scheme at 18 years will pay Rs. 55 per month and Rs. 100 if joining at the age of 29. The pension will be paid once they reached the age of 60.
“(We are starting) Mega Pension Yojana, namely Pradhan Mantri Shram Yogi Mandhan, to provide assured monthly pension of 3000 rupees per month, with the contribution of 100 rupees per month, for workers in unorganized sector after 60 years of age," Goyal said in his Budget speech.
“Will benefit 10 crore workers in the unorganised sector, may become the world's biggest pension scheme for the unorganised sector in five years," he added.
Domestic workers, beedi workers, small shop workers among others may benefit from the announcement but the details on how it will be implemented and how the government will calculate the income threshold is yet to be spelt out.
Goyal also doubled gratuity cap to Rs 20 lakh from 10 lakh.