Missed out on the budget? Catch up on all the highlights and what they mean for you here.
As India set its eyes on the Union Budget announcement by finance minister, Ms Niramala Sitharaman, one of the biggest expectations was that the budget will help revive the economy and pull it out of one of the worst economic slowdowns in decades. To this end, the government proposed a slew of changes and incentives among which was a major tax rejig. Let’s take a look at the major highlights of Union Budget 2020:
The budget had three main themes:
- Aspirational India
- Economic development for all
- Building a caring society
The FM said that GST has integrated the economy and consolidated multiple taxes. A total of 60 lakh new taxpayers and 105 crore e-way bills have been generated under GST. The average household now saves 4 percent of monthly spend due to reduced GST rates.
Check out the latest Income Tax slabs for your reference: Income Tax Slabs 2020-21
The Prime Minister Kusum Scheme has reduced the dependence of farmers on diesel and kerosene. Today, a total of 20 lakh farmers can set up standalone solar pumps. Government will help 15 lakh farmers set up solarise grid-connected pump sets. Those with barren lands can use the land to produce solar energy and make a livelihood out of it.
Government will revise incentives for use of chemical fertilisers and offer warehouse building incentives to farmers. Mudra loans will also be provided for such self-help groups. Here, women will be the ‘dhanya Laxmi’ in the villages.
The Indian Railways will set up a Kisan Rail for transportation of perishable goods. This will be aided by Krishi Udaan set up by civil aviation that will focus on the north-east and tribal regions.
Agriculturul credit target for 2020-2021 has been proposed at Rs. 15 lakh crore. For agri and allied activities an allocation of Rs 2.83 lakh crore has been made for FY21. This includes agriculture, irrigation, rural development, and Panchayati Raj.
Government will extend ‘Mission Indradhanush’ to cover new diseases and new vaccines. Fit India will also be a part of it. More hospitals in Tier 2 and Tier 3 cities will be empanelled in Ayushman Bharat to benefit poor in these areas. Public Private Partnership mode hospitals will be set up under viability gap funding to look at areas where there are no hospitals.
A total of Rs 69.000 crore has been provided for the healthcare sector of which PM Jan Arogya Yojana will get Rs 6,400 crore.
A New Education Policy will be announced soon. The education sector will now be open to FDI.
Degrees offered by the Top 100 NIRF-ranked institutes can soon be taken online. IND-SAT exam will be held for Asian and African students for scholarships to ‘Study in India’.
A total of Rs 3000 crore will be given for skill development, she added.
The government will set up an Investment clearance cell for entrepreneurs whereby individuals will be offered assistance in funding. A portal will be set up to this end.
The government proposed a scheme on encourage manufacturing of mobile phones, semi conductor packaging and electronic equipment and medical devices. The details of this scheme will be released soon.
Government will introduce a policy that will help build data centre parks throughout the country. All public institutions at Gram Panchayat levels will be provided with digital connectivity. Fibre to home through BharatNet will link 100,000 Gram Panchayats in FY’21 itself. An allocation of Rs 6,000 crore will be provided for BharatNet.
An allocation of Rs 8,000 crore has been set up for the National Mission on Quantum Computing and Technology.
An allocation of Rs 35,600 crore for nutrition-related programmes in FY’21. Further, Rs 28,600 crore will be allocated in FY’21 by government for women-linked programmes.
A tax-payer charter will be institutionalised in the budget. This will help in building trust. Government will ensure that citizens need not worry about tax harassment. There is a debate on building criminal liabilities for civil acts. Companies Act will be amended to correct this.
The government proposed a new personal Income Tax regime:
NEW INCOME TAX SLABS VS. EARLIER – NO EXEMPTIONS APPLICABLE
– 10% for income between Rs 5 lakh-7.5 lakh against 20%.
– 15% for income between Rs 7.5 lakh-10 lakh against 20%
– 20% for income between Rs 10-12.5 lakh against 30%
– 25% for income between Rs 12.5 -15 lakh against 30%
– 30% for income above Rs 15 lakh
This means lower tax rate for those in the Rs 5 to 15 lakh bracket. No tax up to Rs 5 lakh. The rebate continues. The new tax regime will be optional.
To boost startups, tax burden on employees due to tax on Employee Stock Options to be deferred by five years or till they leave the company or when they sell, whichever is earliest. The govt. also extended affordable housing loan deduction by 1 more year. Companies will not be required to pay Dividend Distribution Tax anymore-dividend will be taxed only at the hands of recipients at applicable rates.
The govt. is also going to introduce Aadhaar-based verification of taxpayers and has removed around 70 of more than 100 income tax deductions and exemptions, in order to simplify tax system and lower tax rates.
The Deposit Insurance and Credit Guarantee Corporation has been permitted to increase deposit insurance coverage to ₹5 lakh per depositor from ₹1 lakh. To achieve higher export credit, a new scheme will be launched which will provide higher insurance cover, reduced premium for small exporters and simplified procedure for claim settlements. The Nirvik (Niryat Rin Vikas Yojana) scheme will provide enhanced insurance cover and reduce premium for small exporters. The government also proposed auto enrolment to universal pension coverage and stated that it will sell part of its stake in LIC through an IPO.