Allocates Rs 22,000 cr for power and renewable power
Union finance minister Nirmala Sitharaman in the annual budget for 2020-20 gave strong emphasis on Aspirational India, Economic Development and Caring Society without giving due recognition to the current financial crisis. Sitharaman, however, introduced new income tax slabs with reduced rates in a bid to provide relief to the middle class . But it has come with a rider as the tax payer, who wants to for the new regime, will have to sacrifice the exemptions or will have to continue with the existing tax structure.
To avail the new income tax rates, taxpayers will have to let go of 70 exemptions. They would still be able to avail 30 exemptions. Here are the newly proposed income tax slabs:
No income tax for those earning less than Rs 5 lakh.
Income between Rs 5 lakh and Rs 7.5 lakh annually will be taxed at 10 per cent.
Income between Rs 7.5 lakh and Rs 10 lakh will be taxed at 15 per cent.
Income between Rs 10 lakh and Rs 12.5 lakh will be taxed at 20 per cent.
Income earning between Rs 12.5 lakh and Rs 15 lakh will be taxed at 25 per cent.
Income above Rs 15 lakh will continue to be taxed at 30 per cent.
Sitharaman said that a person earning above Rs 15 lakh per annum and not availing any deductions will pay Rs 1.95 lakh tax, instead of Rs 2.73 lakh now. The tax calculations, however, would vary based on the number and type of deductions one used to avail.
Sitharaman cut short her Budget speech as she felt unwell after speaking for a record 160 minutes in Lok Sabha. Sitharaman had only two pages of her Budget speech unread when she appeared uneasy and was seen wiping sweat from her forehead.
Dividend Distribution Tax Shifted to Individuals Instead of Firms FM said dividend distribution tax has been shifted to individuals instead of companies. In her second Budget presentation, the Finance Minister said concessional tax rate of 15 per cent has been extended to power generation companies. The government plans 100 per cent tax concession to sovereign wealth funds on investment in infra projects, she added.
Sitharaman further said concessional withholding rate of 5 per cent on interest payment to non-residents has been extended up to June 30,2022.
Cut in tax on cooperative societiesFM has proposed reduction of tax on cooperative societies to 22 per cent plus surcharge and cess, from 30 per cent at present. She also announced extending by one year the date of approval of affordable housing projects for availing tax holiday on profit earned by developers. She also announced extension of additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021. Sitharaman further said the Income Tax Act will be amended to allow faceless appeals against tax orders on lines of faceless assessment.
FM said the FY21 total expenditure will be at Rs 30.42 lakh crore while Net Market Borrowing for FY20 at Rs 4.99 lakh crore and net market borrowing for FY21 at Rs 5.36 lakh crore. Loss of substantial revenue in short term due to corporate tax rate cut. According toi FM, the revised expenditure estimate for FY20 is at Rs 26.99 lakh crore and revised receipts for FY21 at Rs 19.32 lakh crore.
FPI limit on corporate raised from 9 to 15%. Nominal growth of GDP is estimated at 10%. Fiscal deficit of 3.5 for the current year and 3.5 for 2020-2021.
16-point action plan listed for farmers FM has proposed 16 point plan listed for farmers who are currently passing through agrarian ciris. This aims to achieve the goal of doubling farmers’ income by 2022. Comprehensive measures for 100 water-stressed districts being proposed in Budget 2020. Agricultural credit target has been set at Rs 15 lakh crore. Indian Railways will set up Kisan Rail through PPP arrangement, for transportation of perishable goods.
Financing on Negotiable Warehousing Receipts will be integrated with e- National Agricultural Market. NABARD Refinancing Scheme to be further expanded, agri credit target for the year 2020-21 has been set at 15 lakh crore rupees. Framework for development, management and conservation of marine fishery resources to be put in place. Rs 2.83 lakh crore rupees allocated for agriculture and allied activities, irrigation and rural development.