Budget for 2019 and how to save tax

The government will only recalibrate the 2019 Budget if average crude oil price dip below US$50 per barrel, says Finance Minister Lim Guan Eng.

The Ministry of Finance prepared next year’s budget based on crude oil prices of US$70 per barrel.

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Lim said there was no necessity now to recalibrate the budget as the government was looking at average crude oil prices and not daily prices.

“Previously, when oil prices rose from US$52 per barrel to US$72 per barrel, we did not recalibrate the budget, so similarly it had gone down from US$72 per barrel to US$52 per barrel now.

“We will only consider recalibrating the budget if average crude oil price dip below US$50 per barrel,” he told reporters after flagging off the ‘Occupy Beach Street Christmas Run’ here today.

However, Lim, who is also the Member of Parliament for Bagan, said the market was quite volatile now although analysts are still positive average crude oil prices could reach US$70 per barrel.

“You know nowadays, Donald Trump (President of the United States) says something and it will affect the price (of crude oil).

“For the time being, as long as average prices are still above US$50 per barrel, there is no need to recalibrate but we will continue to monitor prices and see how (prices move) next year,” he added.

Oil prices crashed to new one-year lows last Tuesday, erasing between four and seven per cent throughout last week, dragged down by a deepening sense of global economic gloom, as well as, fears of an oversupply in the oil market itself.

West Texas Intermediate (WTI) dropped below US$47 per barrel and Brent fell to the US$56 level.

The reasons for the sudden meltdown were multiple.

Rising crude oil inventories and expected increases in shale production were weighing on oil prices but the price crash was accentuated by the broader sell-off in financials. — Bernama

Budget News 2020

New Delhi: Implicitly signalling a second tenure for itself, the Narendra Modi government proposes to chart its economic thinking in its budget for the year starting 1 April, with focus on an ambitious expenditure programme. The finance ministry plans to present a full budget on 1 February, a senior government official said. Budget 2019, which will be the last by the present government ahead of the 2019 Lok Sabha elections in May, going by established practice should be a vote-on-account, with government seeking Parliament approval for expenditure from the Consolidated Fund of India for the interim period.

Lok Sabha elections are scheduled in the first half of next year as the incumbent government will complete its five-year tenure in May.

If indeed the government goes through with its plans, not only is it signalling its confidence about being re-elected, it is also reworking an established precedent. Earlier, the government had advanced the presentation of the Union budget to 1 February so as to let government departments undertake spending from the beginning of the fiscal. Now it is effecting a similar departure on the grounds that an economy of the size of India cannot afford to lose direction in the intervening period till a new government takes charge.

Signalling policy continuity in the budget is the correct approach, said D.K. Srivastava, chief policy adviser at EY India. “As long as no major policy changes including tax policy are undertaken in the budget and expenditure approval is taken for the relevant period, then it would be an appropriate approach,” he added.

After sending an initial letter on 18 October, the finance ministry sent reminders to central government departments and ministries on Tuesday to submit inputs by 30 November for finance minister Arun Jaitley’s budget speech.

“We will signal continuity. We cannot dislocate the economy just because of the elections. Wherever there is gap in expenditure, we will plug it,” the government official said on condition of anonymity.

The person said the government would be sticking to routine and publishing an Economic Survey, essentially the economic report card for 2018-19, though normally this task is left to the next government. The government has appointed a panel under former Reserve Bank of India governor Bimal Jalan to select the next chief economic adviser in the finance ministry and so far it has held two meetings to vet 20 applications.

The government also advertised on 23 October for the post of senior economic adviser in the finance ministry for a period of three years, signalling its intention to strengthen the economic research wing in North Block.

The finance ministry is putting North Block in quarantine starting 3 December, restricting the access of journalists to ministry officials as budget preparation gains momentum.

“Letters have already been sent to departments to submit revised estimates for 2018-19 and budget estimates for 2019-20,” another government official said requesting anonymity. “We may also hold consultations with industries and various stakeholders to understand their expectation from the budget.”

Income Tax changes in 2019 2020 after Budget announcement

 Tax Rates for an Individuals for the AY 2019-20:

Tax Rates for Individuals
Income		Rates of Income Tax
		Individual (Age less than 60 Years)	Senior Citizen (Age above 60 Years)	Super Senior Citizen (Age above 80 Years)
1.	Up to Rs. 2,50,000	Nil	Nil	Nil
2.	Rs. 2,50,000 to Rs. 3,00,000	5%	Nil	Nil
3.	Rs. 3,00,000 to Rs. 5,00,000	5%	5%	Nil
4.	Rs. 5,00,000 to Rs. 10,00,000	20%	20%	20%
5.	Above Rs. 10,00,000	30%	30%	30%

*The above rates are exclusive of surcharge and cess. 

Tax Rates for Corporate Assessee for the A.Y. 2019-20:

Tax Rates* for Corporate Assessee for the A.Y. 2019-20
Status of Taxpayer		Rates of income-tax
1.	Firms/Local Authority	30%
2.	Domestic Company	30%/25% #
3	Foreign Company	40%
# Tax rate is 25% if turnover or gross receipts of the domestic company in the previous year 2016-17 doesn't exceed Rs. 250 crore

*The above rates are exclusive of surcharge and cess.

3. Tax Rates* for Co-operatives Societies for the A.Y. 2019-20:

Tax Rates* for Co-operatives Societies for the A.Y. 2019-20
Income		Rates of income-tax
1.	Up to Rs. 10,000	10%
2.	Rs.10,000 – Rs.20,000	20%
3	Above Rs. 20,000	30%

*The above rates are exclusive of surcharge and cess.

4. Rates of Surcharge:

Rates of Surcharge
Particulars		Taxable Income
		50 Lacs to 1 Crore	1 Crore to 10 Crores	Exceeding 10 Crores
1.	Individuals/HUF	10%	15%	15%
2.	Firm/ Local Authority/ Co-operative Society	Nil	12%	12%
3.	Domestic Company	Nil	7%	12%
4.	Foreign Company	Nil	2%	5%
5.	Co-operative Societies	Nil	12%	12%

 * The health &education cess at the rate of 4% shall be computed on aggregate of Income-Tax and Surcharge.

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