Budget 2020 Highlights and Important Points: 10% tax for income between 5 lakh-7.5 lakh; 15% tax for income between 7.5 lakh to 10 lakh; 20% tax for income between 10 lakh to 12.5 lakh; 25% tax for income between 12.5 lakh to 15 lakh ; 30% tax for income above 15 lakh
Budget 2020 Highlights: Amidst the economy struggling with a six-year low GDP growth, Union Finance Minister Nirmala Sitharaman presented the Budget 2020 on Saturday that focused on raising the purchasing power by cutting income tax rates and boosting rural income.
This was the longest Budget speech by any finance minister, going beyond 2 hours 30 minutes. Sitharaman, 60, broke her own record of a 2-hour-17-minute-long maiden Budget speech in July 2019.
Fiscal deficit target pegged at 3.8% of GDP for FY20. Insurance cover for bank depositors has been raised from Rs 1 lakh to Rs 5 lakh.
In a shot in the arm for the middle class, Nirmala Sitharaman has proposed a new simplified tax regime soon. “10% tax for income between 5 lakh-7.5 lakh; 15% tax for income between 7.5 lakh to 10 lakh; 20% tax for income between 10 lakh to 12.5 lakh; 25% tax for income between 12.5 lakh to 15 lakh ; 30% tax for income above 15 lakh. No income tax for those with taxable income below Rs 5 lakh,” says Sitharaman.
Union Budget 2020 highlights:
#1. Between 2006-2016, 271 million are out of poverty and we should be proud of it, says Finance Minister Nirmala Sitharaman.
#2. Country has moved on from over 4 per cent growth in 1950s to 7.4 per cent to 2014-19 period, says Sitharaman
#3. Total of 60 lakh new taxpayers and 105 crore e-way bills generated under GST, says Nirmala Sitharaman. Average household now saves 4 percent of monthly spend due to reduced GST rates, she added.
#4. Finance minister Nirmala Sitharaman says Central government debt reduced to 48.7 per cent of GDP in 2019 from 52.2 per cent.
#5. Sitharaman now starts putting out a 16-point guide to make India an aspirational economy. India is now 5th largest economy in world, the FM says.
#6. Government to incentivise farmers to go solar. Over 6 crore farmers under Pradhan Mantri Fasal Bima Yojna have been insured. Pradhan Mantri Kisan Urja Suraksha and Utthan Mahabhiyan (PM KUSUM) to be expanded, providing 20 lakh farmers in setting up standalone solar pumps.
#7. Railways will set up Kisan Rail through PPP model so that perishable goods can be transported quickly. Krishi Udaan scheme to transport agri products to national as well international destinations to be launched.
#8. Agri-credit target for the year 2020-21 has been set at Rs 15 lakh crore.
#9. Rs 69,000 crores for allocated for the healthcare sector, says Finance Minister Nirmala Sitharaman.
#10. Education and training: Rs 99,300 crore allocated for education in FY21. Govt will start Ind-Sat Exam to promote study in India and a degree-level online education programme for the deprived. A total of Rs 3,000 crore will be given for skill development.
#11. Allocation for Swachh Bharat Mission for 2020-21 stands at Rs 12,300 crore. In further push to PM Modi’s ‘Nal se jaal’ scheme, govt proposes Rs 3.6 lakh crore towards piped water supply to households.
#12. National Textile Mission to be launched with a proposed Rs 1,480 crore allocation, says FM Nirmala Sitharaman.
#13. To boost infrastructure, Sitharaman says 9,000 km of economic corridor will be set up. “Chennai-Bengaluru expressway will also be started. Delhi-Mumbai expressway to be completed By 2023,” says FM.
#14. 550 WiFi facilities have been commissioned at railway stations.
1 lakh gram panchayats to get optical fibre link, says FM Sitharaman. An allocation of Rs 6,000 crore will be provided for BharatNet scheme.
#15. Allocation of Rs 27,300 crore for development of industry and commerce.
#16. FM Nirmala Sitharaman announces Rs 20,000 crore for renewable energy sector in a bid to tackle pollution and climate change. A new scheme of smart meters will be launched, says Sitharaman.
#17. 100 more airports to be developed by 2025, says Sitharaman. The FM also said 1,150 trains will run under the public-private partnership (PPP) mode, also four stations will be redeveloped with the help of the private sector. Besides, the minister promised more Tejas type trains to connect tourist destinations.
An allocation of Rs 8,000 crore will be made for National Mission on Quantum Computing and Technology.
#18. Rs 35,600 crore allocated for nutritional related programme in FY21 while Rs 85,000 crore has been budgeted for the welfare of Scheduled Castes and other backward classes. Tourism promotion gets Rs 2500 crore.
#19. Women schemes, senior citizens in Budget: Sitharaman says enrolment ration for girls under ‘Beti Bachao Beti Padhao‘ is higher than boys. “Gross enrollment of girls is 94.32 per cent in elementary levels, 81.32 per cent in secondary level and 59.7 per cent in higher secondary level,” she says. Further, Rs 28,600 crore will be allocated in FY21 for women-linked programmes. Allocation for senior citizens and ‘Divyang’ enhanced to Rs 9500 crore.
#20. Here is something for Delhiites! Sitharaman proposes Rs 4,400 crore to tackle Delhi’s air pollution problem. Last year, the Supreme Court had termed the situation as “worse than Emergency” as air quality dipped to hazardous levels.
#21. Your money gets safer! Insurance cover for bank depositors raised from Rs 1 lakh to Rs 5 lakh, says FM Nirmala Sitharaman.
Currently, in the (unlikely) event of a bank going bust in India, a depositor has claim to a maximum of Rs 1 lakh per account as insurance cover — even if the deposit in their account far exceeds Rs 1 lakh. Depositors holding more than Rs 1 lakh in their account have no legal remedy in case of the collapse of the bank.
#22. Foreign direct investment (FDI) into the country has increased to $284 billion during 2014-19 from $190 billion in previous five years.
#23. Nirvik (Niryat Rin Vikas Yojana) scheme to provide enhanced insurance cover and reduce premium for small exporters.
#24. Focus on MSMEs: More than 5 lakh MSMEs benefited from RBI’s restructuring of loans, says FM Sitharaman. “Government has asked RBI to consider extending window of debt structuring by one year to March 2021 for this purpose,” she says.
#25. Fiscal deficit target pegged at 3.8% of GDP for FY 2019-20. FY21 fiscal deficit target pegged at 3.5% of GDP. Fiscal deficit is considered the most important marker of a government’s financial health. Not letting the fiscal deficit go completely out of control has been one of the standout achievements of the Modi government.
#26. Government to sell part holding in LIC. Besides, govt to also sell stake in IDBI Bank to private investors. That LIC has been identified as a candidate for a potential public listing by the government. The government’s move is a part of efforts to push through an aggressive disinvestment and asset monetisation programme.
#27. Nominal growth of GDP for 2020-21 has been estimated at 10 per cent, says Nirmala Sitharaman.
#28. Cheer for the middle class! Sitharaman proposes new simplified tax regime soon. New income tax rates: 10% tax for income between 5 lakh-7.5 lakh; 15% tax for income between 7.5 lakh to 10 lakh; 20% tax for income between 10 lakh to 12.5 lakh; 25% tax for income between 12.5 lakh to 15 lakh; 30% tax for income above 15 lakh.
#29. On account of the income tax relief, Sitharaman says it will cost the exchequer Rs 48,000 crore revenue loss. “Dividend Distribution Tax to be removed. Dividend shall be taxed at the hands of the recipients,” she said.
#30. To boost investments and shore up the lagging economy, corporate tax for existing companies slashed to 22 per cent. Govt proposes 100 per cent tax concession to sovereign wealth funds on investment in infra projects. Moreover, concessional tax rate of 15 per cent extended to power generation companies.
#31. Coming to affordable housing now: Finance Minister Nirmala Sitharaman extends additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021. In another boost, Sitharaman proposes tax holiday to affordable housing developers.
#32. ‘Vivad se Vishwas’ scheme announced by Sitharaman for direct tax payers whose appeals are pending at various forum. 4.83 lakh direct cases pending in various appellate forums.
“Under the scheme, taxpayer to pay only amount of disputed tax. They will get complete waiver on interest and penalty if scheme is availed by March 31, 2020,” Sitharaman said.
#33. 15th Finance Commission has cut state share of central taxes by one percentage point to 41 per cent.