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India budget: Gold, petrol to get costlier; no new tax proposals

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Filed on July 5, 2019 | Last updated on July 5, 2019 at 12.45 pm
India, budget, Narendra Modi, Nirmala Sitharaman, 2019/20 fiscal year, Gold, petrol

(AFP)

NRIs with Indian passports be given Aadhar cards upon arrival without the mandatory 180-day waiting period.

India on Friday unveiled a budget aimed at boosting infrastructure in several sectors, the first since the Bharatiya Janata Party led by Prime Minister Narendra Modi returned for a second term in power.

The budget for a New India has a roadmap to transform the agriculture sector of the country, said PM Narendra Modi.

Here are the highlights of Finance Minister Nirmala Sitharaman's budget for the 2019/20 fiscal year beginning April 1:

* NRI portfolio investment route to be merged with foreign portfolio investment

* No need for PAN, can use Aadhaar card even for I-T returns

* Aadhaar for NRIs on arrival in India with no waiting period

Deficit

* Fiscal deficit for 2019/2020 seen at 3.3% of GDP

Borrowing

* Govt to borrow a gross 7.1 trillion rupees via bonds in 2019/20

* Govt to borrow a net 4.73 trillion rupees via bonds in 2019/20

* Short term borrowing seen at 250 billion rupees in 2019/20

* Govt to buy back 500 billion rupees of bonds in 2019/20

Revenues/receipts

* Dividends from state-owned firms seen at 574.87 billion rupees in 2019/20

* Gross tax revenue seen at 24.6 trillion rupees in 2019/20

* Net tax revenues seen at 16.49 trillion rupees in 2019/20

Taxation

* To increase customs duty on gold and precious metals to 12.5%

* Will levy tax deduction at source of 2% for cash withdrawals exceeding 10 million rupees per year

* Proposes relief in securities transaction tax

* All companies with annual turnover of 4 billion rupees will now be under the 25% tax bracket

* Customs duty on steel raised to 7.5% from 5%


Expenditure

* Total government spending seen at 27.86 trillion rupees in 2019/20

* Govt to spend 1.74 trillion rupees on pensions in 2019/20

* Govt to spend 6.6 trillion rupees on interest payments in 2019/20

Economy

* India will become a $3 trillion economy in the current fiscal year, and a $5 trillion economy in the next few years

* India to invest heavily in infrastructure and job creation

* Government will raise part of its gross borrowing in external markets in foreign currencies

Investment

* India will ease foreign direct investment restrictions in single-brand retail

* Proposes further opening up of FDI in aviation, insurance, media and animation sectors

* Important to get retail investors to invest in treasury bills

* Will allow foreign investors to buy debt of listed real estate investment trusts

* Government aiming for $14.5 billion target for disinvestment proceeds in FY20

Banking

* State-owned banks proposed to be provided 700 billion rupees of additional capital

* Will strengthen central bank's authority over shadow banks

* There is a need to give tax parity to non-banking finance companies

Infrastructure

* The government will upgrade 125,000 kilometres of roads over the next five years at a cost of $11.6 billion

* Railway infrastructure will need an investment of $72 billion between 2018 and 2030

* Govt to encourage global companies to set up large manufacturing plants

* India will enter into aircraft financing and leasing activities

Domestic gold futures rally on customs duty on gold

Spot gold in the international market held steady near $1,415 an ounce as investors stay away from taking fresh bets ahead of the key US employment data scheduled later in the day. There are expectations that the job data would offer more cues on US Feds stance on interest rate cut.

Anyhow, prices are on track for a seventh consecutive weekly gain with prices gained more than 2 per cent during this week.

At the same time, domestic gold futures rallied by more than 2 per cent due to an increase in customs duty on gold and precious metals in the Union Budget. The Finance Minister has proposed a hike in customs duty on gold to 12.5 per cent from the existing 10 per cent.

Those without PAN can now file returns using Aadhaar

PAN and Aadhaar cards are now interchangeable, said Finance Minister Nirmala Sitharaman.

"More than 120 crore Indians now have Aadhaar card, therefore for ease of taxpayers I propose to make PAN card and Aadhaar card interchangeable and allow those who don't have PAN to file returns by simply quoting Aadhaar number and use it wherever they require to use PAN," she said in the Lok Sabha.

The Union Minister also said that faceless and anonymous assessment system for income tax will be rolled out in phases this year.  While PAN is used to ensure that every citizen pays their taxes, an Aadhaar Card is a unique identification (UID) number issued by the government.

NRIs Aadhar cards for NRIs upon arrival in India

Finance Minister Nirmala Sitharaman on Friday proposed that Non-Resident Indians (NRIs) holding Indian passports be given Aadhar cards upon their arrival in India without the mandatory 180-day waiting period.

"I propose to consider issuing Aadhar card for NRIs with Indian passports after their arrival in India without waiting for the mandatory 180 days," Sitharaman said while presenting the 2019-20 Union Budget in the Parliament.

Sitharaman also announced that 18 new diplomatic missions will be opened in various locations across Africa.

Sensex slumps 460 points post Budget presentation

The Union Budget 2019-20 failed to cheer the equity market as the BSE Sensex slumped over 460 points minutes after Finance Minister Nirmala Sitharaman concluded her speech.

At 1.28pm, the Sensex fell 466 points to the day's low of 39,441.38, from the previous close of 39,908.06 points.

Although the market opened on a positive note, the downtrend began within half an hour of Sitharaman's speech as she presented her first budget and trade remained largely choppy throughout the two hours 15 minutes speech.

Sensex has, however, trimmed some losses and at 1.44pm was trading at 39,632.85, lower by 275.21 points or 0.69 per cent from its previous close.

The Nifty50 on the National Stock Exchange traded at 11,849.40, lower by 97.35 points or 0.81 per cent from the previous close.


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