Sitharaman promises to reduce corporate tax to 25% for all companies
In the course of a four-hour debate on the Finance Bill 2019 and the Appropriation Bill in Rajya Sabha on Tuesday, Finance Minister Nirmala Sitharaman reiterated the Modi government's promise to lower the corporate tax to 25 per cent for all of India Inc. "We have brought it [corporate tax] down in order that now 99.3 per cent industries are all covered by the 25 per cent rate and, therefore, hardly any is left behind," she informed the Upper House, adding, "We shall cover them sooner".
On July 5, while presenting her maiden Union Budget, Sitharaman announced that companies with an annual turnover up to Rs 400 crore will now be taxed at the lower rate of 25 per cent as a step towards phased reduction in tax rates. Previously, the lower rate was only applicable to companies having annual turnover up to Rs 250 crore while the rest of India Inc incurred a 30 per cent tax rate.
"Reduction in corporate tax rate is done with an intention," Sitharaman said in the Rajya Sabha, explaining the rationale behind the move. "A trajectory was given to us as to how we will bring the corporate tax from the high rate that it was, from 30 per cent down to 25 per cent. It was a commitment given in the first ever Budget in 2014. I had to honour it."
Sitharaman also touched upon the other changes that have been introduced under direct taxes, such as the incentive on buying electric vehicles and exempting start-ups from angel tax - a tax on the premium (over the fair value) received on its shares when sold to investors. "All these underline the fact that unless we continuously make taxation come down and make sure that the larger principle of redistribution is attended to, equity is not going to be addressed," she added.
According to her, on the indirect taxation front too, changes had been made from the point of view of getting a level-playing field. "Customs Act has been touched because we want to have greater compliance. Some repetitive errors, which are being done, should not be done. People who are repeatedly gaming the system, if we have enough evidence, we want to take them to a Magistrate Court and be able to search them physically," she said. Such a physical search of violators was not possible with amending the Act. "But, of course, it will be done in the presence of a Magistrate and, therefore, no worries about empowering the Customs without a responsibility," she clarified.
2% TDS on cash withdrawals exceeding Rs 1 crore
Responding to Rajya Sabha members alleging that the Budget punishes cash withdrawals, Sitharaman defended the move on the grounds of greater transparency and accountability. "We have had 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," she explained.
Significantly, she made it clear that this TDS will not be over and above the tax liability of the individual or the entity and can be set off when income tax returns are filed. The total TDS paid on cash withdrawal beyond Rs 1 crore will not be constituted as income in hands of the taxpayer. This provision would come into effect from September 1, 2019.
Direct Tax Code
Sitharaman also informed the House that the Task Force has completed its job on the Direct Taxation Code and is likely to submit the report on July 31 "Ultimately, we are interested, whether it is direct or indirect taxation, we are working towards simplifying the burden on compliance, which every assessee undergoes," she said. The Finance Bill and the Appropriation Bill were returned by the Rajya Sabha on Tuesday after being endorsed by voice vote.
Amendments to various Acts
The FM claimed that the most important change was the amendment to the Prevention of Money Laundering Act (PMLA). "Of the eight different changes that we are bringing into the PMLA, six relate to explanatory notes because we find that in the courts, many of those offenders under the PMLA - if there are two cases happening - try to club both the cases although they may be materially different and seek a bail," she explained. In the bargain, the law does not get invoked in its true letter and spirit and the government is now taking steps to make this Act more effective. So, such changes in the definition and explanatory matters have been done in the PMLA.
The RBI Act has also been amended. "We needed to change this because we are giving powers to the RBI now in order that they will be able to regulate and also give resolution in the matters of NBFC-related areas," she explained, adding, "The SEBI Act is also being changed because we needed to make sure that some of the surplus fund and alteration; destruction and mutilation-related matters are all taken up."
Andhra Pradesh becomes 1st state in India to reserve 75% private jobs for locals
Andhra Pradesh has become the first state in the country to offer 75 per cent reservation to locals in private jobs. Andhra Pradesh Assembly on Tuesday passed the Andhra Pradesh Employment of Local Candidates in Industries/Factories Act, 2019, under which privates jobs across factories, industrial units, joint ventures, private projects will be reserved for local Andhra people.
Fulfilling his poll promise, Chief Minister Jagan Mohan Reddy said his government, for the first time in the history of the Telugu state, had provided over a lakh permanent jobs to the locals. During his state-wide Prajasankalp Padyatra before the 2019 Lok Sabha elections, the YSRCP chief had promised to create jobs for locals. "The proposed Bill will ensure employment to 75 per cent of the local candidates in industries/factories, joint ventures and projects taken up under the PPP mode," a government notification said.
While other states are also mulling high reservation in private jobs for residents, they haven't implemented it. On July 9, Madhya Pradesh announced that it would bring in a legislation to provide 70 per cent reservation in private jobs for locals.
The new law in Andhra will now require private companies to train locals if people with suitable skills are not available. "This will help the person who has lost their lands and their occupations for facilitating the establishment of industries and other unemployed youth by ensuring that their livelihoods are guaranteed and sustained," said the government in a statement.
Chandrayaan 2 Lifts Off; "Bounced Back With Flying Colours," Says ISRO
India's moon mission Chandrayaan 2 lifted off from its launch pad at Andhra Pradesh's Sriharikota at 2:43 pm today on board a giant heavy-lift rocket. India's space scientists had a narrow one-minute window for their second attempt at launching the moon mission today, a week after the mission was aborted 56 minutes before lift-off.
In visuals, scientists at the Indian Space Research Organisation's control room closely watched the rocket as it gained speed and headed towards the outer atmosphere, propelled by the massive thrust from the powerful 640-tonne rocket.
Minutes later, the rocket successfully put Chandrayaan 2 into Earth's orbit - and a booming applause reverberated inside the control room as the scientists who have been working hard for the mission congratulated one another, hugged and shook hands.
"I am extremely happy to announce that GSLV Mark 3 successfully injected the Chandrayaan 2 into orbit... It is the beginning of a historical journey for India... We fixed a serious technical snag and ISRO bounced back with flying colours," ISRO Chairman K Sivan said, drawing loud applause from the scientists gathered around him at the control centre.
The GSLV Mark 3 - ISRO's largest and most powerful rocket - is 44 metres long or as tall as a 15-storey building. The 20-hour countdown for the launch of the Rs. 1,000-crore mission began Sunday evening at 6.43 pm.
The rocket propelled into space an orbiter, a lander 'Vikram' (named after ISRO founder and eminent Indian scientist Vikram Sarabhai) and a moon rover 'Pragyaan'. Once the Vikram lander separates, it will head to a region on the moon that is little explored till date - most lunar landings have taken place in the northern hemisphere or in the equatorial region.
A mission by China landed in the northernmost part, followed by Russia's Luna missions. Most of the American lunar landings, including Apollo missions, were in the Moon's equatorial region.
The success of Chandrayaan 2 mission will make India the fourth country after the US, Russia and China to pull off a soft landing on the moon.
The mission was stopped 56 minutes and 24 seconds before its launch last Monday after a technical snag was discovered in the unmanned launch vehicle system. ISRO said the decision was taken "as a measure of abundant precaution".
After the soft landing on the moon, or as K Sivan terms it, the "15 minutes of terror", the rover will carry out research, including a thorough mapping of the moon's resources, looking for the presence of water on the moon and clicking high resolution images as well.
The ISRO chairman has called Chandrayaan 2 the "most complex mission ever undertaken by ISRO".
Good news! After NEFT, RTGS, SBI makes all IMPS transactions free
In a big relief to SBI customers, the public sector bank has said it will not impose IMPS (Immediate Payment Service) charges from August 1, 2019. The SBI IMPS charges will also be zero for the users who want to transfer funds via its app Yono, internet banking and mobile banking.
"The bank will waive-off IMPS charges for its INB, MB and YONO customers effective from August 1, 2019," the state-owned lender said in a statement.
Earlier, the country's largest lender had waived off IMPS charges on fund transfer of up to Rs 1,000 only. However, from August 1, there will be nil charges on all other IMPS slabs ( Rs 1,001 to 10,000; Rs 10, 001 to Rs 25,000; Rs 25,001 to Rs 100,000; Rs 100,001 to Rs 200,000).
IMPS is an interbank electronic fund transfer service, which is available round the clock. In July, the state-owned bank had also waived off NEFT (National Electronic Funds Transfer) and RTGS ( Real Time Gross Settlement System) charges, after the Reserve Bank of India(RBI) decided to do away with the charges with an aim to move the country towards less-cash economy.. The RTGS is meant for large-value instantaneous fund transfers while the NEFT System is used for fund transfers up to Rs 2 lakh.
At March-end, 2019, the number of SBI customers using internet banking were more than six crores, while 1.41 crore persons were using mobile banking services.
The bank claims to have around 18 per cent market share in mobile banking transactions.
Nirmala Sitharaman says Budget 2019 paints 'big picture' of new Modi govt
In her reply on the debate over the Union Budget 2019 on Wednesday, Finance Minister Nirmala Sitharaman said at the Lok Sabha that the budget gives a "big picture" of the new Narendra Modi government that has been brought back to power after a resounding victory in the General Elections this year.
The minister added that the projected strength made in the Budget is realistic and reflective of the goals of the government. In her reply at the Lok Sabha, Nirmala Sitharaman said, "This Budget certainly comes at a time when an Interim Budget had already been presented and it's the last year of the 14th Finance Commission. This Budget has two bookends and it gives a big picture of this newly-elected government which has returned to power with a bigger mandate."
She spoke about the farmers and said that the Budget took care of the 'kisaan' of the country. "We have ensured cash transfers of Rs 6,000 for all farmers throughout the country and not just a few," she said.
The Finance Minister also spoke about the government's commitment towards the education and health sectors. "The Budget 2019-20 reflects the commitment of this government to substantially boost investment in agriculture, social sector, particularly in education and health, keeping the fiscal deficit at 3.3% of GDP as against 3.4% which was envisaged in the Interim Budget," she said.
Nirmala Sitharaman's maiden Budget was condemned by opposition leaders such as Shashi Tharoor and Adhir Ranjan Chowdhury. "There is nothing new, it is a repetition of old promises. They are talking about new India but the Budget is the same old wine in a new bottle. There is no plan for employment generation, no new initiatives," said Chowdhury.