The Finance Minister of India, Nirmala Sitharaman presented her second Union Budget of the year 2020-21 in Parliament on 1st February 2020.
Sitharaman presented the Union Budget for the second time after Narendra Modi led National Democratic Alliance (NDA) returned to power.
The Union Budget of 2020-21 is primarily focusing on empowering the educational sector in the Financial Year 2020-21 and new education policy will be revealed soon for the same.
Sitharaman also proposed a new income tax slabs. Here are some highlights from the Union Budget 2020-21.
Taxable income slabs and corresponding tax rates:
- Up to Rs. 5 lakh – Nil
- Rs 5 lakh to Rs 7.5 lakh – 10%
- Rs 7.5 lakh to Rs 10 lakh – 15%
- Rs 10 lakh to Rs 12.5 lakh – 20%
- Rs 12.5 lakh to Rs 15 lakh – 25%
- Rs 15 lakh and above – 30%
Union Budget 2020 Highlights:
- To simplify the tax system and lower tax rates, around 70 of more than 100 income tax deductions and exemptions have been removed.
- Dividend Distribution Tax (DDT) is removed. Companies will not be required to pay DDT. Dividend to be taxed only at the hands of recipients, at applicable rates.
- Cash reward system envisaged incentivising customers to seek invoice.
- Tax on cooperative societies reduced to 22% without exemptions.
- To end tax harassment, new taxpayer charter to be instituted.
- Proposes to amend the Companies Act to bring criminal liability in certain areas.
- Aadhaar-based verification of taxpayers is being introduced to weed out a dummy or non-existent units; instant online allotment of PAN on the basis of Aadhaar.
- Registration of charity institutions to be made completely electronic, donations made to be pre-filled in IT return the form to claim exemptions for donations easily.
- Tax holiday for affordable housing extended by 1 year.
- Govt plans to sell part of its holding in Life Insurance Corporation (LIC) by way of Initial Public Offering.
- Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
- Excise duty proposed to be raised on Cigarettes and other tobacco products, no change made in the duty rates of bidis.
- Basic customs duty on imports of newsprint and light-weight coated paper reduced from 10% to 5%.
- Customs duty rates revised on electric vehicles and parts of mobiles.
5% health cess to be imposed on the imports of medical devices, except those exempt from BCD.
- Lower customs duty on certain inputs and raw materials like a fuse, chemicals, and plastics.
- Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.
- New Simplified return for GST from April 2020.
- Start-ups with turnover up to Rs. 100 crore to enjoy a 100% deduction for 3 consecutive assessment years out of 10 years.
- App-based invoice financing loans product to be launched, to obviate the problem of delayed payments and cash flow mismatches for MSMEs.
- Depositor insurance to Rs 5 lakh from the current Rs 1 lakh to help bank depositors.
- Banking Regulation Act to be amended to strengthen Cooperative banks.
- New common entrance test for non-gazetted government jobs and public sector banks.
- Special bridge courses to be designed by the Ministries of Health, and Skill Development to fulfil the demand for teachers, nurses, para-medical staff and caregivers abroad.
- 5 new Smart Cities to be set up via the PPP model.
- 100 more airports to be set up by 2024 to support UDAN scheme.
- Accelerated development of highways will be undertaken; Delhi-Mumbai expressway and two other projects to be completed by 2023. Chennai-Bengaluru Expressway to be started.
- NHAI to monetize 12 lots of highway bundles of over 6,000 km before 2024.
- Young engineers and management graduates will be roped in for infrastructure projects under the Project Preparation Facility.
- About Rs 22,000 crore already provided for supporting National Infrastructure Pipeline.
- 5 archaeology sites to be developed for world-class museums
Hastinapur (Uttar Pradesh)
Adichanallur (Tamil Nadu)
- An Indian Institute of Heritage and Conservation under Ministry of Culture proposed; with the status of a deemed University.
- 4 more museums from across the country to be taken up renovation and re-curation.
- FM urges all states and UTs to replace conventional energy meters by pre-paid smart meters in 3 years, this will give consumers the freedom to choose supplier and rate as per their requirements.
- More Tejas-like trains for tourists.
- 150 new train to be introduced on a PPP basis; Four stations will also be redevelopment with the help of PPP.
- US-like SAT exam to be held in African and Asian countries for benchmarking foreign candidates who wish to Study In India.
- Degree-level full-fledged online education programme to be offered by institutes in the top 100 in the National Institutional Ranking Framework.
- New Education Policy to be announced soon.
- 150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021.
Budget Allocation to various sectors
- Rs 3.37 lakh crore allocated as the defence budget.
- Rs 1.6 lakh crore allocated to agriculture and irrigation.
- Rs 1.23 lakh crore for Rural Development and Panchayati Raj.
- Rs 4,400 crore for clean air.
- Rs 53,700 crore for ST schemes.
- Rs 1.7 lakh crore allocated to transportation.
- Rs 2,500 crore for tourism promotion.
- Rs.3150 crore proposed for Ministry of Culture for 2020-21.
- Rs 22,000 crore allocated to power and renewable energy.
- Rs 99,300 crore allocated for the education sector.
- Rs 3,000 crore rupees for skill development.