Parliament Approves Modi Govt's FY20 Budget
Parliament
on Tuesday gave its approval to Modi-2.0 government's maiden budget with
Finance Minister Nirmala Sitharaman saying tax
proposals aim at redistribution of funds to bring more equitable development.
The
Appropriation (No 2) Bill, 2019 and the Finance (No 2) Bill, 2019 -- cleared by
the Lok Sabha last week -- were returned by the Rajya Sabha on Tuesday after voice vote.
This
completed the three stage Parliamentary approval process, which also included a
debate on the general budget and working of some of the ministries.
Replying
in a four-hour debate on the two bills, Sitharaman
justified raising tax on petrol and diesel by Rs 2
per litre each saying inflation was at rock bottom
and the move would not add any significant burden on prices.
Almost
the entire Opposition boycotted the debate, demanding that Prime Minister Narendra
Modi should make a statement on US President Donald
Trump's claim of him seeking mediation on Kashmir issue.
She also
justified slapping of 10 per cent import duty on newsprint, which the newspaper
industry has criticized as backbreaking, saying the move would give domestic
paper producers a level playing field.
"This
government, now that we have come with the larger mandate and for the second
time, is aiming to bring in such changes for building in a 'New India' wherein
there is greater transparency, less of government, more of governance and making
sure that re-distribution of resource happen with great equity principle in
mind," she said.
Sitharaman said the
Budget 2019-20 proposals, including raising tax on super-rich and levy of a tax
on high value cash withdrawals were aimed at creating the new India and curbing
tax evasion as well as black money.
"So,
if you were to raise more taxes, more collection is only going to result in
more re-distribution of funds thereby bringing far more equitable
development," she said.
On the
levy of two per cent TDS (tax deducted at source) if aggregate cash withdrawal
from one or more accounts exceeds Rs 1 crore, the
Finance Minister said this will not be over and above the tax liability of the
individual or the entity and can be set off when returns are filed.
The total
TDS paid on cash withdrawal beyond Rs 1 crore will be
adjusted against the total tax dues of the taxpayer and would not be
constituted as income in hands of the taxpayer. This provision would come into
effect from September 1, 2019.
She also
said that the report on Direct Tax Code would be submitted on July 31 and the
government was keen to reduce tax compliance burden on taxpayers.
The
minister further said the government has brought in amendments in the seven
Acts under direct tax.
Citing
some of the examples, she said the government has proposed to reduce corporate
tax to 25 per cent, relief to startups and affordable housing.
These
have been brought-in largely to promote ease of living and making sure equity
in re-distribution takes place, she said.
The
minister said task force on the the Direct Taxation
Code has completed its job and in all likelihood, they will be submitting the
report on July 31, and once the report comes, the government will certainly
look into it.
"Ultimately,
we are interested, whether it is direct or indirect taxation, we are working
towards simplifying the burden on compliance, which every assessee
undergoes. We want to reduce the burden, not just at the tax on him, but also
on compliance matters," Sitharaman said.
During
the debate a member had raised the issue of two per cent tax on high value cash
withdrawals from banks.
To this,
the minister said there had been several instances of people dealing and
transacting huge sums of money in cash from their accounts.
When we
trace it to their names, they have not even filed their Income Tax Return, the
minister said.
Sitharaman also
told the members despite higher devolution to the states, the central
government has ensured that central assistance to states has also been
substantially increased.
It was Rs 2,55,968 crore in the year
2013-14, prior to the Fourteenth Finance Commission and is now Rs 3,89,802 crores in 2019-20.
Therefore,
there is an increase of Rs 1,33,834
crores through the central assistance.
"I
want to assure the members that the increase in the devolution percentage from
32 per cent to 42 per cent has not cut down on the Central assistances, which
we give from the Centre to the States," she added.
The
minister also explained to the members different
provisions of the Finance Bill and rationale behind raising taxes in certain
cases.