It’s time to gear up for the Union Budget which is scheduled on 5 July 2019, the first after the Narendra Modi-led National Democratic Alliance retained power in May. The fact that this is going to be the second time in the year when the Budget will be announced — an interim Budget was announced on 1 February before the Lok Sabha elections — might raise your adrenaline levels.
While this is also the time when taxpayers would be busy with their Income Tax Returns (ITR) filing for FY2018-19, one simply cannot ignore the impact the upcoming Budget might have on various personal finance matters. So, let’s check out some crucial money decisions that you may want to take after the Union Budget 2019 announcement by newly-appointed Finance Minister Nirmala Sitharaman.
Buying A Vehicle
If you’re looking to buy a two or a four-wheeler vehicle, you’ll possibly be well-advised to wait until the Budget announcement. The government’s vision to become a country with all electric vehicles may get a boost during the upcoming Budget. As such, you may get e-vehicles at competitive prices if the government announces any perks on them. This should also be seen with the fact that many automobile companies are waiting to launch their electric vehicle models in the near future.
Also, auto manufacturers are demanding for lowered import duty on vehicle components. If their demand is addressed during the Budget, it may reduce the price of petrol vehicles too.
Investing In Gold
Gold imports form a significant portion in India’s total import bill. Therefore, the government is eyeing to discourage investment in physical gold by incentivizing or promoting various non-physical gold investments like Sovereign Gold Bonds, Gold Exchange-Traded Funds and Gold Mutual Funds. So, if you want to invest in gold, you may want to wait for the Budget announcement as you may get a better investment opportunity in non-physical gold instruments.
Taking A Home Loan
The government also wants to achieve its vision of ‘Housing for All by 2022’. Housing and infrastructure are one of the key employment generating sectors. Therefore, there are expectations that the government may bring in certain major incentives for homebuyers mainly in the form of additional tax relief. So, if you are looking to buy a house, there is no harm in delaying the decision by a few more days. Things might look even better considering the fact that the government has already slashed the Goods and Services Tax (GST) on under-construction properties from 12% to 5%, and from 12% to 1% for affordable housing.
Things You Should Not Delay
However, don’t wait for the Budget if you have not purchased a life insurance plan yet and are looking to buy one. There is little chance and scope that the Budget will come up with an announcement that can reduce the premium of life insurance policies. Similarly, if you’ve already got a life and health insurance policy, don’t delay in their premium payments.
Also, don’t discontinue your mutual fund Systematic Investment Plans (SIP), because Budgets have little or no impact on SIPs in the long-term.
It will be important to note here that Budget 2019 may influence the ITR that you would file for FY 2019-20 i.e., in AY 2020-21, but it won’t have any impact on the ITR that you have to file for FY 2018-19 (the last date for which is July 31, 2019). So, don’t delay your ITR filing for FY2019-20 because of the Budget — if your papers are ready, file it as early as possible to avoid last-minute glitches.
The author is CEO, Bankbazaar.com