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Sreeram Viswanath

Expert

Published on: Sep 17, 2026

Interim Budget 2019: A Comprehensive Analysis

An Interim Budget is declared during the year of the General Lok Sabha Elections and is valid for the months leading up to this event. This recently introduced Budget marks the sixth under the current governing regime. This article provides an in-depth analysis of the Interim Budget 2019.

Tax Exemptions for Individuals

The Interim Budget has introduced significant tax benefits for individual taxpayers. Individuals are exempted from paying income tax if their annual income is up to Rs 5 lakh. This initiative is set to benefit an estimated three crore middle-class taxpayers. Additionally, individuals with an income of up to Rs 6.5 lakh can enjoy tax exemption if they invest in Provident Funds and specified equities.

Note: Despite these exemptions, taxpayers in this bracket must file their income tax returns to leverage the rebate fully.

Additional Income Tax Benefits

Significant developments in the tax regime include:

  1. An increase in the standard deduction for salaried individuals by Rs. 10,000, bringing it to Rs. 50,000 annually.
  2. Capital gains tax exemptions under Section 54 are extended up to Rs 2 crores for sellers reinvesting in two house properties.
  3. An increase of Rs. 30,000 in the TDS threshold on bank interest and post office income.
  4. The TDS threshold on rental income has increased to Rs 2.4 lakhs annually.
  5. Interest from banks and post offices is now exempt from TDS up to Rs 40,000.
  6. Income tax returns will now be processed within 24 hours.
  7. All taxpayer verifications will be conducted electronically within two years with no human intervention.
  8. No change in income tax rates has been announced for the present.

Pradhan Mantri Kisan Samman Nidhi

This farmer-centric scheme of the Interim Budget aims to benefit at least 12 crore small farmers, at a cost of Rs 75,000 crore annually to the Government. Under this scheme, small farmers owning less than two hectares of land will receive Rs 6,000 per year, credited directly to their bank accounts in three equal installments.

Additional Farmer Benefits

  1. A 2% interest rate subvention for farmers affected by natural calamities, with a 3% subvention for timely loan repayment.
  2. Farmers engaged in animal husbandry and fisheries to receive a 2% interest subvention.
  3. The introduction of the Kamdhenu scheme for enhancing animal husbandry activities.
  4. Establishment of a separate Ministry for Fisheries.
  5. An allocation of Rs 750 crores for the Rashtriya Gokul Mission.
  6. Formation of Rashtriya Kamadhenu Ayog for sustainable genetic upgradation of cow resources.

Benefits for Workers

  1. A monthly pension of Rs 3,000 for retired workers under the Pradhan Mantri Shram Yogi Maandhan Scheme, applicable to those earning below Rs 15,000.
  2. The Employees State Insurance eligibility limit increased to Rs 21,000 from Rs 15,000.
  3. The Gratuity Limit increased to INR 30 lakhs from the earlier 10 lakhs.
  4. The Employees Provident Fund Organization to provide Rs 6 lakhs for grievous injuries suffered by women.
  5. The Government's contribution to the New Pension Scheme increased from 10% to 14%.

Railway Budget: Historic Allocation

The Railway sector has received a record-breaking allocation of Rs 1.58 lakh crore, with additional capital support of Rs 64,587 crore. The target operation ratio for the next fiscal year has been set at 95%. For now, no fare hike for railway commuters has been announced.

Income Tax Act Section 80-IBA Extension

Income tax relief on notional rent from unsold houses has been extended to two years until March 2020. Section 80-IBA allows a 100% deduction on profits from housing project development.

Health Sector Initiatives

Proposals for enhancing the health sector include:

  1. Allocating a total of Rs. 61,398 crore to the health sector.
  2. Establishing Ayushman Bharat Health and Wellness Centres under the National Urban Health Mission.
  3. An allocation of Rs. 31,745 crores for the National Health Mission, a significant increase from the previous Rs 20,129 crore.
  4. Plans to set up twenty-two AIIMS in Haryana for enhanced medical aid.

Boosting the Entertainment Industry

  1. Provision of single window clearance for all filmmakers.
  2. Anti-camcording provisions added to the Cinematograph Act to combat piracy.

MGNREGA: Empowering Rural Employment

An allocation of Rs. 60,000 crores has been made for the Mahatma Gandhi National Rural Employment Guarantee Act, reaffirming its status as an Indian labor law and social security measure that guarantees the 'right to work'.

Fiscal Programme and Allocations

  1. Aiming for a 3% fiscal deficit target by 2020-21, currently improved to 3.4%.
  2. Allocating Rs 3,27,629 crore for Centrally Sponsored Schemes in BE 2019-20.
  3. Rs 38,572 crore for the National Education Mission in BE 2019-20.
  4. Rs 27,584 crore for the Integrated Child Development Scheme in BE 2019-20.
  5. SC and ST community allocations of Rs 76,801 crores and 50,086 crores respectively for BE 2019-20.

Welfare Measures for Marginalized Communities

  1. The reservation quota of 10% is supported through a 25% increase in seats for these communities.
  2. All willing households to receive electricity connections by March 2019.

Development for Nomadic Tribes

A committee under NITI Ayog has been tasked with identifying and supporting the most marginalized Denotified, Nomadic, and Semi-Nomadic Tribes. A new Welfare Development Board will be established for their advancement.

Support for MSMEs and Traders

  1. GST registered SMEs to benefit from a 2% interest subvention on incremental loans up to Rs 1 crore.
  2. Women-owned SMEs to supply at least 3% of the government undertakings’ 25% sourcing needs.
  3. Increased emphasis on internal trade development.

Digital Villages Initiative

Efforts are underway to make India more digital over the next five years, targeting the transformation of one lakh villages into digital villages, fostering innovation and technological advancement.

Vision 2030: Future Roadmap

The Government plans to transform India into a modern, technology-driven, high-growth, and transparent society. Key dimensions include:

  1. Building strong physical and social infrastructures, improving the ease of living.
  2. Digitizing government processes leveraging youth leadership for a more digital India.
  3. Leading a transport revolution, creating a pollution-free environment with electric vehicles and renewables.
  4. Expanding rural industrialization using modern digital technologies for increased employment.
  5. Ensuring clean rivers and safe drinking water through efficient water usage.
  6. Scaling up the nation's coastline for development and growth.
  7. Launching satellites and enabling human space travel by 2022 via the Gaganyan program.
  8. Ensuring self-sufficiency in organic food production for local use and export.
  9. Creating a healthy India through the Ayushman Bharat initiative and ensuring equality for women.
  10. Transforming into a Minimum Government-Maximum Governance nation with proactive, responsible bureaucracy.
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Frequently Asked Questions

Common questions about Interim Budget 2019: Tax Exemptions & Key Financial Changes.

The Pradhan Mantri Kisan Samman Nidhi scheme is aimed at providing financial assistance to small and marginal farmers. Farmers owning less than two hectares of cultivable land will be eligible to receive Rs. 6,000 per year under this scheme, which will be paid in three equal installments of Rs. 2,000 each.
The Interim Budget 2019 provides significant tax relief to individual taxpayers. Those with an annual income of up to Rs. 5 lakh are exempted from paying income tax. Additionally, individuals with an income of up to Rs. 6.5 lakh do not need to pay tax if they have investments in Provident Funds and prescribed equities.
The Interim Budget 2019 has increased the standard tax deduction for salaried individuals from Rs. 40,000 to Rs. 50,000 per year. This means that salaried individuals can claim a higher deduction, resulting in lower taxable income and potential tax savings.
The Interim Budget 2019 has increased the capital gains tax exemption under Section 54 to Rs. 2 crores for sellers of house property, provided they reinvest the proceeds. Additionally, the exemption will now be available for up to two house properties.
The Interim Budget 2019 has increased the TDS threshold on bank interest and income from post office investments to Rs. 40,000 from the previous limit of Rs. 10,000. The TDS threshold on rental income has also been increased to Rs. 2.4 lakhs from Rs. 1.8 lakhs.
The Interim Budget 2019 has proposed that within two years, all verification of taxpayers will be pursued electronically without any interface with the taxpayer. This means that all assessments and IT Return verifications will be done by an anonymized tax system without any intervention by officials.
The Interim Budget 2019 has introduced several initiatives for the agricultural sector, including the Pradhan Mantri Kisan Samman Nidhi scheme, interest subvention for farmers affected by natural calamities, and increased allocations for animal husbandry and fisheries activities.
The Interim Budget 2019 has proposed a monthly pension of Rs. 3,000 for retired workers in the organized and unorganized sectors under the Pradhan Mantri Shram Yogi Maandhan Scheme. Additionally, the eligibility cover limit for Employees State Insurance has been increased, and the Gratuity Limit has been raised to Rs. 30 lakhs.
The Interim Budget 2019 has allocated a total outlay of Rs. 61,398 crores for the health sector. It has proposed the establishment of Ayushman Bharat Health and Wellness Centres under the National Urban Health Mission and an increased allocation for the National Health Mission.
The Interim Budget 2019 has proposed a vision for India by 2030, which includes building robust infrastructure, making India a digital nation, creating a pollution-free environment, expanding rural industrialization, ensuring clean rivers and safe drinking water, harnessing the potential of coastlines and oceans, achieving self-sufficiency in organic food production, and transforming India into a Minimum Government-Maximum Governance nation.