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Budget 2019: Finance minister does a fine balance for individuals

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By Chaitali Dutta

Union Budget 2019 India: There was a slew of expectations from Budget 2019. Now the cat is out of the bag. And indeed, it is a house cat, not a jungle cat. Overall the Budget was a staid one with focus on entrepreneurs and rural upliftment. The affordable housing segment got a boost with an additional Rs 1.5 lakh income tax deduction on interest paid on loans for purchase of house up to Rs 45 lahh. This facility is available up to March 31, 2020. This is one policy which will give a fillip to the ailing real estate sector, specifically in tier 2 and tier 3 cities.

Boost to EVs, blow to gold

If you are considering buying a vehicle soon, you may consider buying an electric vehicle. You will be able to avail of Rs 1.5 lakh of tax deduction on your loan. It is a positive effort towards a cleaner environment and tax saving for the individuals as well. Compare that relief against the additional cess and excise duty of Rs 1 per litre each on both petrol and diesel. Your monthly fuel cost is set to go up.
Another area of possible pain could be the gold purchase you are planning for a marriage in the family. The import duty on gold and precious metals just went up from 10% to 12.5%. As financial advisors we therefore suggest families to be prepared for known expenses in the future by diversifying their savings into various asset classes.

Retail customers can buy T-bills

As retail customers, we may soon be able to purchase treasury bills (<365 days) and treasury bonds (>365 days). These are nothing but bonds issued by the central government and hence are of highest credit rating. As of now, if we buy T-bills we need to have a Securities General Ledger (SGL) account. Now we will be able to buy long term bonds up to 30 years maturity, in our regular demat account itself.
Although the mid-income group did not get any sop on income tax, the top income category has been levied with additional surcharge. For individuals earning above Rs 2 crore up to Rs 5 crore, the surcharge rate will now be 25% and for those earning above Rs 5 crore, it is 37%.

Income Tax Calculator: Know post-Budget 2019 Income Tax out go here

Aadhaar, PAN interchangeable

Aadhaar and PAN will now be interchangeable. Individuals not having a PAN will be able to file their returns with their Aadhaar. The financial industry will have to issue fresh KYC norms to accommodate the change. If you are a non-resident Indian (NRI), there is good news for you. The mandatory 180 days waiting period for issue of Aadhaar has been done away with and you will be issued your card immediately on reaching India. Additionally, NRIs can now invest in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This could turn out to be a win-win situation for both the investor as well as these sectors.

Watch FE Explained video: What is Union Budget?

I would sum up this analysis of the Budget 2019 from the perspective of personal finance by saying that there is only so much the government can do within the constraints of fiscal deficits, rising unemployment and wide economic disparity of its people. We, as individuals, must focus on getting our own house in order.

See to it that your families do not run into a deficit budget, keep aside a reserve for contingencies, allocate an amount for future needs and cover your backs with adequate risk cover. We know the ropes. But how many of us actually do it? That is one family we are talking about. Our finance minister is budgeting for a mind-boggling 1.36 billion Indians. Cut her some slack.

[The writer is founder, AZUKE Personal Finance Advisory (]