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The union budget 2020 with measures to boost the sluggish economy is presented by Finance minister Nirmala Sitharaman on February 1st. This year’s budget is focused on economic development by increasing the income of the people and the empowerment of the marginalized sectors. With prominent changes in the various sectors and schemes further empowering the existing schemes, the union budget 2020 accommodated some major changes.
Key Highlights of Union Budget 2020
Income Tax Slab Rates
- The new slabs rates that are introduced through this union budget are: 5-7.5 lakh- 10% , 7.5 -10 lakh: 15%, 10 -12.5 lakh: 20%, 12.5 -15 lakh: 25%, above 15 lakh- 30%.
- Dividend Distribution Tax (DDT) is abolished, and dividends will be taxed only in the hands of recipients at applicable rates.
- Review your investment portfolio
Housing
- Affordable housing tax holiday extended for a year. Loans taken for an affordable house will be allowed an additional deduction up to Rs. 1.5 lakhs on interest paid.
Direct Tax
- Tax disputes interest to be waived off if the amount paid by Mar 31
- Cooperatives to be taxed at 22%
- Bonds listed in GIFT City will be charged concessional 4% withholding tax
- Optional new direct tax scheme for taxpayers
- More benefits for taxpayers under the new direct tax policy
- To introduce a simplified personal income tax policy
- Tax harassment to be abolished
- 100% tax exemption on sovereign wealth funds’ infra investment
- 70 of 100 income tax exemptions are removed
Indirect Tax
- Footwear, furniture customs raised
- Customs duty exemptions to be reviewed
- Some customs duty exemptions withdrawn
- To review rules of origin for imports under the free trade deal
- To ensure no undue gains for imports under FTA laws to be amended.
- Cut down on effective tax for all commodities
Financial Sector, Market
- credit guarantee scheme for NBFCs to be enhanced
- NRIs will be allowed to buy certain govt securities
- overseas investors will have access to some gilts
- corporate bonds, FPI limit to be raised to 15% from 9%
- NBFCs to be covered by the Factoring Regulation Act
- RBI requested to mull extending MSME recast window by a year
- A proposal for a robust system to check the health of scheduled commercial banks
Infrastructure Industry
- Commerce industry allocated with 273 billion rupees
- 14.8 billion rupees allocated to national technical textile mission
- Domestic manufacturing to be boosted
- To launch new export credit scheme NIRVIK
- Higher insurance coverage and lower premiums for NIRVIK
- Small exporters to be allocated NIRVIK
- Moot new manufacturing scheme for medical devices
- Electronic items manufacturing to be boosted
- Scheme for mobile phone manufacture, semiconductor packaging
- Investment clearance cell proposed
Union Budget 2020 FAQs:
The union budget 2020 was declared on February 1st. By Financial minister Mrs. Nirmala Sitharaman.
The union budget of 2020 was focused on the empowerment of marginalized sectors by increasing their income. New income tax slabs rates were declared and many sectors and schemes were empowered with new measures.
The new slabs rates that are introduced through this union budget are: 5 -7.5 lakh- 10% , 7.5 -10 lakh: 15%, 10 -12.5 lakh: 20%, 12.5 -15 lakh: 25%, above 15 lakh- 30%.
An additional deduction up to 1.5 lakhs will be allowed, on the interest amount paid. Also, the bill declared the extension of the affordable tax holiday by a year.
