Finance Minister Nirmala Sitharaman proposed Budget for the financial year 20-21 on 1st February. The key highlights of the budget are-
The minister prospered new income tax slab rates and made it optional for the taxpayers to choose between the new tax regime and the existing rates which were for the financial year 19-20. The new tax slab offers a rebate to the taxpayers which is quite attractive but when you choose this you can not avail any of the tax exemptions and deductions. While opting for the older regime, it makes you eligible to avail of the deduction such as deduction on a home loan, PPF, and investments. So as a taxpayer you can choose from the old and new rates depending on your income & investments.
For example: For one who is having more than 5 lakh yearly income and doesn’t have an investment to show- sticking to new rates will be beneficial. Whereas those who are having home loans, PPF savings or whose kids are studying can show it as their investments and hence opting for the older rates can be more beneficial for them. However, you need to calculate well from your income and investments in order to select one.
New Income Tax Slab FY 20-21
Up to ₹2.5 lakh – Nil
₹ 2,50,001 to ₹ 5,00,000 – 5%
₹ 5,00,001 to ₹ 7,50,001 – 10%
₹ 7,50,001 to ₹ 10,00,000 – 15%
₹ 10,00,001 to ₹ 12,50,000 – 20%
₹ 12,50,001 to ₹ 15,00,000 – 25%
Above ₹15,00,000 – 30%
Previous tax slab FY 19- 20
Up to ₹ 2.5 lakhs – Nil
₹ 2,50,001 to₹ 5 lakh – 5%
₹ 5,00,001 to ₹ 10 lakh – 20%
₹ 10 lakh & above – 30 %
- For senior citizens aged 60 and below 80 years up to 3 lakhs is the tax exempted and up to 5 lakhs for 80 years and above.
- ₹ 12,300 crores allocated to Swach Bharat Mission for the year 2020-21.
Insurance Cover for Bank Deposit to be Increased :
Insurance Cover for Bank Deposit to be Increased from one lakh to 5 lakh from this financial year.
In the case of bank failures like PMC, the customers were the ones who had to suffer the most. Till last year you deposit 5 lakh or one crore the bank used to provide you an insurance cover of one lakh only, but in this financial year, the insurance cover for your deposited amount has been increased to a maximum of 5 lakh. So now at least keeping 5 lakh in the bank is safe. 🙂
Budget 2020: Companies Act to be amend to decriminalise civil offences
Tax harassment would not be tolerated- said Nirmala Sitharaman.
She further added that- we are willing to put in law that tax harassment cannot be tolerated when we are talking about citizens.
New Direct Tax Dispute Settlement Scheme Announced:
Under this, you get a time of 2 months which is applicable till 31st march. During this time you can settle any of your pending tax disputes whether persisting from months or years. You just need to pay the disputed taxable amount for your pending cases and your interest and penalties will be waived off.
16-point step to Boost Agriculture industry.
- To boost the condition of farmers in the country, the Finance Minister has announced a 16-point action plan.
- The central government committed to double farmer’s income by 2022.
- Under this plan 6.11 crore farmers to be insured through the prime minister insurance scheme.
- The scheme involves another sector which is the fishery- under this 200 lakh tonnes fishing production to be increased. For this, the minister has proposed to set up a 500 fish farmer producer organization.
- India to have 5 new smart cities to be made in public & private partnerships.
- 1.7 trillion allotted for transportation allocation.
- Setting up a 9,000 km economic corridor.
- Chennai- Bengaluru expressway announced in the budget.
- More Tejas like trains to connect tourist destinations all over the country.
- The Delhi- Mumbai expressway to be completed by 2023.
- 100 more airports to be built across the country by 2024.
- Sovereign wealth fund investments on infrastructure to get 100% tax exempted with a lock-in period of 3 years. The timeline to avail of this benefit is fixed which is March 31st, 2024.
In Budget 2020-21, Finance Minister Sitharaman allocated ₹ 99,300 crore for the education sector and ₹ 3,000 crore for skill development for the next fiscal
LIC to be launched as IPO
In the budget 2020 Finance Minister proposed a plan to raise funds through LIC IPO.
For the Power sector
₹273 billion allotted for the promotion of industry and commerce.
For Cities with more than 1 million people, the budget 2020 allocates ₹44 billion for clean air incentives.
Relief on tax Burden for start-ups:
Tax relaxation for start-ups as they are contributing to boost the economy of the country.
The eligibility to claim for this is- The turnover of the start-ups should be up to ₹100 crore, the deduction claimed can be 100% on the profit for computing tax liability for three consecutive years out of 10 years from the incorporation of the company.
Imported electric vehicles & parts to become costly.
Well apart from all this, the pricing remains the same for almost all the goods and services except some imported items. Well, on a serious note hope this budget does some good to boost the falling Indian economy.