Budget 2020

Highlights

Finance Minister Nirmala Sitharaman presented Union Budget 2020 in the Parliament on 1.02.2020

FINANCIAL SECTOR

  • Deposit Insurance Coverage to increase from `1 lakh to `5 Lakh per depositor.
  • Eligibility limit for NBFCs for debt recovery under SARFAESI
  • Act proposed to be reduced to asset size of `100 crore or loan size of `50 Lakh.
  • Proposal to sell balance holding of government in IDBI Bank Proposal to sell balance holding of government in IDBI Bank.
  •  Separation of NPS Trust for government employees from
    PFRDAI.

Announcements for women

  • Govt allocates Rs 28,600 crore for programmes specifically for women.
  • Modi government will set up a task force to recommend the marriageable age for women

 

Benefit of new Tax regime

  • 69 % of taxpayers will be able to save up to rupees 78000 every year( according to revenue department).

Tax proposals

  • Concessional corporate tax rate of 15 per cent to new domestic companies in manufacturing and power sector.
  • Tax concession for sovereign wealth fund of foreign governments and other foreign investments.
  • Tax benefits to Start-ups by way of deduction of 100 per cent of their profits are enhanced by increasing turnover limit and period of eligibility.
  • Concessional tax rate for cooperatives proposed.
  • Turnover threshold for audit of MSMEs increased.
  • Extension of time limits pertaining to the tax benefits for affordable housing.
  • Issuance of Unique Registration Number to all charity institutions for easy tax compliance.
  • Health cess to be imposed on imports of medical equipment given these are made significantly in India.
  • Dividend Distribution Tax removed and classical system of dividend taxation adopted.
Income bracketTax rate(percent)IncomeTax rate
Below 5 lakhsExempt12.5-15 lakhs25
5-7.5 lakhs10Above 15 lakhs30
7.5-10 lakhs15
10-12.5 lakhs20

Simplified GST return shall be implemented from 1st April 2020. Refund process to be fully automated.

Under the new regime

  • A person earning Rs 10,00,000 as income will have to pay flat Rs 78,000 as tax (including cess) without any deductions.
  • Pay Rs 78,000 tax on Rs 10,00,000 annual income
  • Bank Deposit guarantee raised to Rs 5 lakh from the current Rs 1 lakh!

Industry, Commerce and Investment

  • Scheme to encourage manufacturing of mobile phones, electronic equipment and semi conductor packaging.
  •  National Technical Textiles Mission for a period of 4 years.

Infrastructure

National Logistics Policy to be launched soon
  • Roads: Accelerated development of Highways.
  •  Railways: Four station redevelopment projects
  • 150 passenger trains through PPP mode.
  • More Tejas type trains for tourist destinations.
  • Port: Corp g jp oratizing at least one major port.
  • Air: 100 more airports to be developed under UDAAN