Today (01 Feb, 2020) FM Ms Nirmala Sitaraman presented the Budget 2020. This is the first full budget of this government & they have a huge challenge ahead to bring the economy on track. Here are the Union Budget 2020 – Key Provisions & highlights of Union Budget 2020.
We have also written a separate post on
Budget 2020 – Impact on Tax & Investments
Budget 2020 – Impact on NRI Taxation & Investments
Union Budget 2020 – Key Provisions & Highlights
– Govt to raise funds via listing of LIC in FY 21 & Seling IDBI Bank.
– Deposit insurance raised to Rs 5 lakh (Currently this is Rs 1 Lakh)
– FY21 fiscal deficit target pegged at 3.5% of GDP
– FY20 fiscal deficit at 3.8% of GDP vs earlier target of 3.3%
– Companies Act to be amended to decriminalize civil offenses
– FY21 nominal GDP growth pegged at 10%
– To bring new education policy; allocates Rs 99,300 crore for the sector in FY21
– Railways: Proposal to be announced for using land along railway lines for setting up solar power plants. More trains to be introduced under PPP model. Tejas type trains to connect tourist destinations. Mumbai-Ahmedabad High-speed train to be actively pursued.
– 100 more airports to be developed by 2024. More Udan flights, including ‘Krishi Udan’ flights for transport of agricultural produce for the North East.
– 5. 69,000 Crores allocated to the healthcare sector.
– To introduce a new simplified personal tax regime
– No income tax for income up to Rs 5 lakh
– 10% income tax for those earning between Rs 5 lakh to Rs 7.5 lakh versus 20% earlier
– 15% income tax for those earning between Rs 7.5-10 lakh versus 20% earlier
– 20% income tax for those earning between Rs 10-12.5 lakh versus 30% earlier
– 25 income tax for those earning between Rs 12.5-15 lakh versus 30% earlier
– No Tax Audit upto 5 Cores. The earlier limit was Rs 1 Crore.
– Donee has to update the information of donor on income tax portal
– Income above Rs 15 lakh to continue to pay tax at 30%
– New income tax scheme is optional & without exemptions. These are:
If you opted New tax slab you need to forgo the following:-
1 Travel concession or assistance u/s 10(5)
2 HRA u/s 10. (13A)
3 any other allowance or benefits for meet expenses of duties u/s 10 (14)
4 Home loan interest u/s 24(b)
5 All deduction under chapter VIA (i.e. 80C, 80D, 80G ) other than NPS Contributions u/s 80CCD and deduction u/s 80JJAA (not for salaried person)
6 With set off loss from house property – in a nutshell forgo all benefits, exemption n deductions.
– Dividend Distribution Tax (DDT) abolished, shifted to individuals instead of companies. MFs will have no DDT but Dividend will taxable now in hands of the investor.
– 100% tax exemption on Sovereign Wealth Funds’ India investments
– Tax holiday for affordable housing extended by one-year 31 Mar 2021
– To amend I-T Act to allow faceless appeals
– FY21 divestment target: Rs 2.1 lakh crore versus FY20 target of Rs 1.05 lakh crore
– PAN to be allocated instantaneously on basis of Aadhar.
– International Bullion exchange to be set up at GIFT City, Gujarat
– Scheme for Start-ups: 25 Crores Turnover limit increased to 100 Crores. Period of eligibility
increased from existing 7 years to 10 companies.
These were the Union Budget 2020 Key Provisions & Highlights.
