UNION BUDGET 2020 : Key Highlights

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Amidst all the economic chaos Finance Minister Nirmala Sitharaman presented Union Budget for the year 2020-21 on 01/02/2020.  The budget speech delivered by Finance Minister registered to be the longest Budget Speech ever delivered. During this long budget speech, the Finance Minister made several announcements. A major change in Income tax slab caught everyone’s eyes. Finance Minister Nirmala Sitharaman started her speech by reciting a Kashmiri poem. Sitharaman also paid homage to late Finance Minister Arun Jaitley. The Finance Minister said that Budget 2020 is for boosting income and purchasing power of people. 

Finance Minister Nirmala Sitharaman said that her Budget will have three central themes. The first theme that inspired the budget is aspirational India, wherein every section of the society will aspire for a better lifestyle, healthcare and job opportunities; second is economic development for all, and third is caring society that looks after the need of the weakest of India's citizens. 

 

Key Highlights of Union Budget 2020:

  • Those earning up to Rs 5 lakh in a year will pay no tax.
  • Dividend Distribution Tax (DDT) abolished, shifted to individuals instead of companies.
  • Modi Government has proposed a 100 percent tax concession to sovereign wealth funds on investment in infra projects.
  • Government to grant 100% exemption for sovereign wealth funds in infrastructure.
  • Rs 100 crore allocated for hosting G-20 Summit.
  • A robust mechanism in place to monitor the health of all commercial banks.
  • The government decided to list LIC on the stock exchange.
  • FM allocates Rs 2.83 lakh crores for agro and allied sectors.
  • Government to expand Mission Indradhanush, add more hospitals to Ayushman Bharat.
  • Government proposes the formation of National Police University and National Forensic University.
  • FM promises more Tejas-like trains between key stations and Kisan rail for farmers.
  • Sitharaman says high-speed broadband connection to be linked to 100,000-gram panchayats.
  • Sitharaman says Beti Bachao Beti Padhao made strides; girls' enrolment in schools now more than boys.
  • Five archaeological sites to be developed to iconic sites with museums: Rakhigarhi (Haryana), Hastinapur (UP), Shiv Sagar (Assam), Dholavira (Gujarat) and Adishanaloor (Tamil Nadu). Tribal museum to be set up in Ranchi.
  • Government has allocated Rs 3,150 crore for the ministry of culture, Rs 2,500 crore for the ministry of tourism.
  • Rs 85,000 crore allocated for SCs and OBCs in Budget for the financial year 2020-21.
  • The Centre has allocated Rs 30,757 crores for the Union Territory of Jammu and Kashmir and Rs 5,958 crores for Ladakh in the financial year 2020-21.

New Tax Slab (without exemption)

Income Slab

Tax Rate

0-5 lakh

No tax

5-7.5 lakh

10%

7.5-10 lakh

15%

10-12.5 lakh

20%

12.5-15 lakh

25%

above 15 lakh

30%

 

Budget 2020 has proposed a new tax regime slashing income tax rates and rejigging income tax slabs to reduce total tax payable by individuals. As per the new regime, 70 tax exemptions will be removed.
Budget 2020 has offered taxpayers the option to choose between the existing income tax regime and a new regime with slashed income tax rates and new income tax slabs but no tax exemptions. The new tax regime offers lower tax rates and new tax slabs and simultaneously removes tax exemptions and will result in lower tax outgo for the taxpayer, according to the finance minister.