Increasing the fiscal deficit target from 3.3 per cent to 3.8 per cent to boost the Indian economy, Finance Minister Nirmala Sitharaman today tabled in the Lok Sabha the Union Budget 2020-21.
She announced the launch of a new personal income tax regime that could help the middle class save taxes and also scrapped distribution tax (DDT) on dividends.
New income tax rates, slabs:
Finance Minister Nirmala Sitharaman today proposed new tax slabs and lower rates for income tax in Budget 2020. These rates of income tax are optional, and are available to those willing to forego some exemptions and deductions.
For those who forego reliefs, exemptions, the finance minister said, the new income tax rates will be substantially cut.
The government will forego about 40,000 crores per year in income from new individual income tax rates, she said.
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According to income tax rates, a tax of only 10 percent will be charged to some 5 lakh-7.5 lakh income compared to 20 percent. From 7.5 lakh-10 lakh income, a 15 percent tax rate against the prevailing 20 percent rate. A rate of 20 percent will be charged against 30 percent earlier for revenue between 10-12.5 lakh.For income between the average of 12.5 lakh and the average, 15 lakh will be taxed at 25% compared to the current 30% level. The tax rate will remain at 30 percent for those at around 15 lakh plus income.
The finance minister said that a person who earns about 15 lakh per year and does not make use of any deductions will now pay about 1.95 lakh in tax instead of about 2.73 lakh, a savings of about 78,000, said the finance minister.
New income tax slabs
0 – 2.5 lakh – exempted ₹2.5 lakh – ₹5 lakh – 5% ₹5 lakh – ₹7.5 lakh – 10% (20% earlier) ₹7.5 lakh – ₹10 lakh – 15% (20% earlier) ₹10 lakh to ₹12.5 lakh – 20% (30% earlier) ₹12.5 lakh – ₹15 lakh – 25% (30% earlier) No change in tax rates above ₹15 lakh.
Finance minister Nirmala Sitharaman said today that government plans to sell a partial stake in LIC via IPO or an initial public offering. She proposed in her budget proposal that the government sell its IDBI Bank stake to private investors and also amend the Banking Regulation Act to reinforce cooperative banks.
Furthermore, the finance minister said that the insurance coverage against bank failure will be increased from some 1 lakh to some 5 lakh.
She also suggested expanding exchange-traded funds by floating a Debt ETF, primarily made up of government securities.
list of key budgetary allocations FY21 agriculture allocation ₹1.38 lakh crore
FY21 rural development allocation ₹1.23 lakh crore
FY21 agriculture and rural allocation ₹2.83 lakh crore
FY21 agriculture credit target ₹15 lakh crore
FY21 education allocation at ₹99,300 crore
FY21 healthcare allocation at ₹69,000 crore
FY21 transport infra allocation at ₹1.7 lakh crore
-Budget 2020 removed 70 exemption from personal income tax
-For the MSME sector
Audit threshold for MSMEs raised to ₹5 crores from ₹1 crore
-More on the tax front
-100% tax exemption on Sovereign Wealth Funds’ Indra Investment.
-Concessional 5% withholding tax entended to municipal bonds, Nirmala Sitharaman
-FM Nirmala Sitharaman on the new tax regimes: Lowest, simplest, smoothest
-On DDT
Dividend distribution tax to be removed, companies will not be required to pay DDT, dividend to be taxed at applicable rates only by the recipients.
The government proposed approximately 3,000 crores for ' Skill India ' to provide the country's youth with relevant skill training, Finance Minister Nirmala Sitharaman said on Saturday.
"There is a huge demand in foreign countries for teachers, paramedical staff and carers. But their skills do not match up to employers ' demands. So my government is proposing about 3,000 crores to develop skills, "she said during the presentation of the 90th Budget.
-Government to sell IDBI bank govt stake to private investors
Common eligibility test Recruitment for non-govt posts: Finance Minister Nirmala Sithraman proposed a computer-based online common eligibility test for recruitment for non-govt government posts in Budget 2020.
The government has also proposed establishing a National University of Police and a National University of Forensic Science.
Sitharaman said that the presentation of the 2020-21 budget allocated 99,300 crores to the education sector and some 3,000 crores to skill development.
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Sitharaman said a new education policy will be announced soon by the Narendra Modi government.
According to new proposals announced in the budget, urban local authorities will provide a year's internship for young engineers so they get an idea of how the government works.
Indian Railways will be establishing a Kisan Rail through the model of public-private partnership. "In this budget, comprehensive measures are being proposed for 100 water-stressed districts; agricultural credit targets have been set at about 15 lakh crore," she said.
High speed trains will be actively pursued between Mumbai and Ahmedabad.
550 wi-fi installations were commissioned at the railway stations.
solar capacity to be installed along railway lines, on land owned by railways.
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