Now that Narendra Modi’s is back as the prime minister, here’s how the BJP government’s second term can impact your personal finances and what the full budget 2019 may bring.

1. More income tax relief for middle class? 
In an earlier interview to the Economic Times after the Interim Budget in February 2019, the then Finance Minister Piyush Goyal had hinted that if the Modi government returns to power then the new government may consider more relief for taxpayers in the main budget after the General Elections. The interim budget did not make any changes in the overall tax slabs and tax rates but gave full rebate of tax payable to all those with taxable income up to Rs 5 lakh.

2. Complete overhaul of the income tax law
In 2017, the Modi government formed a task force to draft a new direct tax legislation or code to replace the existing 50-year-old Income Tax Act. The task force was scheduled to submit its report by February 28, 2019. However, this deadline was extended by three months to May 31. Therefore, it is likely that in its second term, the Modi government may replace the existing Income Tax Act.

3. Stricter tax administration
The BJP government’s last term saw the clean money campaign post demonetisation, various tweaks in tax rules and laws to plug leakages and put a check on cash transactions (for instance, the new income tax return forms ask for much more detailed information than before). This trend may continue given the return of the government to power.

4. Time period of home loan subsidy scheme could be extended further
Currently, the credit-linked subsidy scheme (CLSS) for home loans for the Middle Income Group (MIG) ends in March, 2020. With the BJP set to form the government again for the next 5 years, the probability of the time period of the scheme for those in the MIG category being extended further -perhaps till 2022–is high. This may be done to help accomplish the government’s vision of ‘Housing for all’ by 2022 successfully.

5. Promotion of and protective measures for electronic payments
The earlier Modi government had taken several steps to promote digitisation of financial transactions to make India ‘cash-lite’. This trend is also expected to continue. The Reserve Bank of India has already announced that it will soon come up with a new set of customer-protection measures aimed at improving user confidence in electronic payment channels.

6. Pension scheme for senior citizens could be extended further
The Modi government had, in budget 2018, increased the maximum investment allowed under Pradhan Mantri Vaya Vandana Yojana (PMVVY) to Rs 15 lakh per senior citizen. The scheme has also been extended up to March 31, 2020. As this scheme was introduced by the Modi government it is likely that the scheme may be extended further now that the government is back in power.

Full article on: Economic Times