Budget 2020

Income Tax Budget 2020 announced by the Finance Minister Nirmala Sitharaman. The Minister proposes a new simplified income tax regime in her second Budget speech. The Union Budget 2020 proposes new income tax rates for taxpayers.

Direct Tax

• Corporate Tax Rate reduced to 15% for new mfg companies and to 22% for existing companies, the lowest in the world.
• The net market borrowings for 2020-21 are fixed at Rs 5.36 lakh crore.
• New Tax Regime announced: Simplified Personal Income Tax regime proposed in the Budget 2020.

Have a look at the new income tax rates:

• Up to 5 lakh Income: 0%
• From 5 lakh to 7.5 lakh: 10%
• From 10 Lakh to 12.5 lakh: 20%
• From 12.5 lakh to Rs 15 Lakh: 25%
• Beyond Rs 15 Lakh: 30% (No Change)

Income tax rates will remain unchanged at 30% for people earning above Rs 15 lakh.

Budget objective

The budget is not merely a statistical statement of the estimated receipts and expenditure of the government. It is a reflection of the policies and objectives of the government, which the government wants to fulfill through the budget. The notable objectives that the government tries to achieve by budget or by budget related policy.

• To increase the rate of economic growth.
• To remove poverty and unemployment.
• Removing inequalities and using income in right schemes.
• Maintaining price and economic stability in the market

List of items that will become Cheaper

• Imported newsprint and lightweight coated paper will be cheaper. Budget 2020 announcements reduced the customs duty on newspaper import. It has been halved to 5%.
• PTA or Purified Terephthalic Acid will become cheaper. The government has abolished the anti-dumping duty on PTA.
• Tuna Bait, Soya Fibre, Raw Sugar, some alcoholic beverages, agro-animal based products, Soya protein will become cheaper because custom duty has been withdrawn.
• Home loans and Electric cars can also become cheaper after budget 2020.

List of items that will become Costlier

• Several items like petrol-diesel, gold, cashew, auto parts, synthetic rubber, PVC, tiles will become expensive. Tobacco products can also be expensive after this budget.
• The government has hiked the customs duty on footwear. So that it will become a costlier item after Budget 2020.
• Medical equipment, Kitchenware, and tableware will also become costlier.
• The government has increased customs duty to 20% from 7.5% on wall fans that will make it a costlier item.

Education Sector

• Union Budget 2020 proposes foreign direct investment, FDI and External Commercial Borrowings (ECB) in education.

Wellness, Water and Sanitation

• Budget allocates Rs 12,300 crore for Swachch Bharat Mission
• Budget talks about the “Fit India Movement” in the context of India’s fight against the NCDs – non-communicable diseases.

ECONOMIC DEVELOPMENT

• Union Budget 2020 proposes to set up an “Investment Clearance Cell” to offer services such as to be set free investment advisory, land banks and others. An online portal will be launched in this regard.

Indian Railways

• Electrification of around 27000 km of railway lines achieved within 100 days of Modi Government formation in 2019.

Energy Sector

• Prepaid Smart Meters: States will have to replace existing energy meters with the prepaid smart meters.

A CARING SOCIETY

• ‘Beti Bachao, Beti Padhao’: Enrollment of girls in schools is higher than the boys.
• Rs 35,600 crore will be provided for nutrition-related programmes.

Art & Culture

• The government will constitute “Indian Institute of Heritage and Conservation” as a deemed university.

Tourism Sector

• The Tourism Sector will grow at 7.8% to Rs 1.88 lakh crore.

Banking Sector

• To avoid the case of citizen harassment, a taxpayer charter will be enshrined in the statutes.

MSME & Corporate Sector

• The budget proposes a new scheme for MSMEs in the context of subordinate debt.

Strategic Disinvestment & Privatization

Finance Minister Sitharaman proposes to sell the Government’s stake in the Life Insurance Corporation of India (LIC). For this purpose, the LIC IPO will be launched. 

ECONOMY & POLICY

General Economy