*Budget 2020 key highlights*
* GST bring synergy in logistics sector (20% time reduction)
* 60 lakhs new taxpayers added via GST introduction
* New simplified GST returns from April 2020
* FDI elevated during period 2014-2019 to $284bn
* Central government debt reduced to 48.7% of GDP in 2019
* 16 points action plan for agricultural & irrigation sector under aspirational India
* New Education Policy will be announced soon
* ECB and FDI will open in education sector
* Degree level full fledged online programs to be started
* National Police University & Forensic university is proposed to be set up
* INR 99,300 cr proposed for education sector
* Investment clearance cell to be set up to facilitate investments and to provide advisory at State as well as Centre level
* 5 new smart cities to be developed
* Move to develop each district an export hub
* INR 27,300 cr for promotion of industry & commerce
* National logistics policy to be released soon
* Digital refund of duties to exporter
* Setting up of solar panels on barren lands
* More Tejas types train to be introduced to connect iconic cities
* 100 more Airports to be developed by 2024
* Proposed to states to replace old electric meters to the smart pre-paid electric meters. This will give flexibility to consumer to choose service provider.
* INR 22,000 cr proposed for power & renewal energy sector
* Private sectors to built data centre parks throughout the country, policy may come soon
* INR 6,000 cr proposed for ‘Bharat Net’
* Funding for ideation and start up
* INR 28,600 cr proposed in this budget specific to women
* Proposed to set up Indian Institute of Heritage & culture as a deemed university
* 5 Archeological sites would be developed as iconic sites with onsite museums
* Setting up of Tribal Museum in Ranchi, Jharkhand
* INR 2,500 cr proposed for development of Tourism sector
* Taxpayer’s charter to be a part of statute to build confidence/trust
* Government will ensure that citizens need not worry about tax harassment. There is a debate on building criminal liabilites for civil acts. Companies Act will be amended to correct this
* India to host G20 presidency in 2022; INR 100 cr allocated for preparation
* Robust mechanism is in place to monitor health of all scheduled banks
* Insurance cover for deposits increased from INR 1 lakh to 5 lakh
* Universal pension coverage with auto enrollment to be introduced (through PFRDI) to every person
* Invoice financing by NBFCs to MSME sector – Amendments to be made in Factoring Act
* Certain amendments to be made in SARFESI Act
* Non residents can invest in certain Government securities
* Liquidity constraints of NBFCs & HFCs will be addressed – Government has taken steps from last year
* International Buillion exchange to be setup in GIFT IFSC
* LIC initial public offer will come to list on stock exchange; Government will sell part of its holding
*Part-B – Tax Proposals*
* Personal income tax – proposed to bring new income-tax regime for individual Taxpayer’s
New slab rate (without exemption)
10% – income 5 – 7.5 lakhs
15% – 7.5 – 10 lakhs
20% – 10 – 12.5 lakhs
25% – 12.5 – 15 lakhs
30% – Above 15 lakhs
Income upto 5 lakhs no tax, says FM
* if individual ears income of 15 lakhs then tax would be 1.95 lakh vis-a-vis 2.73 lakhs as earlier
* New scheme of individual tax rates is optional
* FM says – reviewed all existing income tax exemptions and removed 70 of them in new regime and will review remaining and rationalize
* Propose to remove DDT and dividend would be taxable in the hands of shareholders; removal of cascading effect of dividend distributed by holding to subsidiary (25k cr revenues forgone on account of DDT abolishion)
* Concessional tax rate for electricity/power generation companies
* 100% tax exemption on new investment by foreign funds in infrastructure sector by 2024 with a minimum lock in period of 3 years
* ESOPs given by startups to employees currently taxed as perquisites; deffering of tax payment by employees to 5 years
* Increase in turnover limit from 25 cr to 100 cr for startups
* Deduction can be claimed by startups upto 10 years
* Tax audit turnover threshold limit increased from 1 cr to 5 cr
* Concessional 5% withholding tax has been extended to municipal bonds. Cooperatives are taxed at 30 percent now. Cooperatives can choose a 22 percent tax with 10 percent surcharge and 4 percent cess with no exemptions.
* Complete online registration of charitable institutions
* Faceless appeals on the line of faceless assessment
* Vivad se Vishwas Scheme introduced – New direct tax dispute settlement scheme
* More than 4.83 lakhs cases pending at various forums
* Taxpayer’s need to pay only disputed amount of tax (no penalty be charged) by March 2020; scheme will be available till June 2020 but some additional payment to made in-addition to tax
* CBDT to adopt Taxpayer’s charter
* PAN shall be instantly allotted on the basis of Aadhar without any filling up of form
* Personal interface with tax administrators will be at minimum level
* GST reforms will continue including a simplified return-filling form. FM says, refund has been simplified and has been fully automated.
Those earning up to Rs 5 lakh in a year will pay no tax.
Income between Rs 5-7.5 lakh, the tax rate is 10%.
Income between Rs 7.5-10 lakh, the tax rate is 15%.
Income between Rs 10-12.5 lakh, tax rate cut to 20% from 30%.
Income above Rs 15 lakh will continue to be taxed at 30%.
A person earning Rs 15 lakh per anum and not availing any deductions will now pay Rs 1.95 lakh tax in place of Rs 2.73 lakh.
The new personal income tax regime entails an estimated revenue foregone amounting to Rs 40,000 crore per year.
Investment clearance cell to provide ‘End-to-End’ facilitation and support to entrepreneurial youth.
Developing five new smart cities in collaboration with states in PPP mode.
Encouraging manufacturer of mobile phones, electronic equipment and semiconductor packaging.
National technical textiles mission to position India as a global leader.
The government’s debt has reduced to 48.9 per cent from 52.2 per cent while presenting the Union Budget in the Lok Sabha.
With renewed vigour, under PM’s leadership, we commit ourselves to present the people of India with all humility and dedication. People have reposed faith in our economic policy, said Sitharaman.
Goods and Service Tax
The new tax regime has resulted in efficiency gains in the transport and logistics sector.
Inspector Raj has vanished. It has benefitted MSME.
Consumers have got an annual benefit of Rs 1 lakh crore by GST.
Credit for farmers
The government to disburse Rs 15 lakh crore among farmers as credit for the year 2020-21.
Refinancing scheme of National Bank for Agriculture and Rural Development (NABARD) will be further expanded.
16-point plan for farm sector
These points include encouraging states to take up model agricultural laws, comprehensive measures for 100 water-stressed districts, PM Kusum Scheme, which removes dependence on kerosene and encourages the use of solar power, balanced use of fertilisers, an important step because currently the use of chemical fertilisers is incentivised.
A village storage scheme is proposed to be managed by SHEs. This will help farmers store more and reduce logistics costs.
Women in the village will be responsible for managing this seamless storage mechanism.
Krishi UDAAN scheme will be launched by the Aviation Ministry.
Horticulture sector with its current produce exceeds the production of food grains.
Financing of negotiable warehousing receipts will be integrating other e-services.
The government aims to eliminate the foot and mouth disease in sheep and goat by 2025.
The doubling of milk production of 53.5 million metric tonnes of milk to 103 metric million tonnes by 2025.
The government will involve youths in the fishery sector.
Rs 2.83 lakh crore outlay for agriculture and allied sector.
Rs 1.23 lakh crore for rural development and Panchayati Raj.
Industry, commerce and road
Rs 27,300 crore for the development of industry and commerce during 2020-21.
The government intends to turn every district into an export house.
Rs 8,000 crore over five years for quantum technologies and applications.
Delhi-Mumbai expressway and two other projects would be completed by 2023.
Monetisation of 12 lots of highway bundles of over 6,000km will be ensured before 2024.
Deposit insurance cover
Increase the insurance coverage of their bank deposits from Rs 1 lakh to Rs 5 lakh.
Deposit Insurance and Credit Guarantee Corporation has been permitted to increase deposit insurance coverage to Rs 5 lakh per depositor from Rs 1 lakh, says Sitharaman.
Will get Rs 2,500 crore in 2020-21
Rs 3,150 crore proposed for Ministry of Culture
Indian Institute of Heritage and Conservation to be established
8 new museums proposed, 5 museums set for a major overhaul
5 iconic sites to see infrastructure development
Boost to infrastructure
100 more airports to be developed by 2024 to support UDAAN Scheme
Rs 22,000 crore for power and renewable energy sector
National Gas Grid to be expanded from the present 16200 km to 27000 km
103 lakh crore for national infrastructure pipeline: 22,000 crores via equity support to infrastructure finance companies
Reforms in banking sector
Deposit insurance coverage to be increased to Rs 5 lakh per depositor
Separate NPS trust for government employees
Proposal to sell a part of government holding in LIC by way of IPO
Invoice financing, subordinate debt, export support schemes
RBI to consider an extension of debt restructuring window for MSMEs till March 31, 2021
Limits for FPI in corporate bonds increased from 9% to 15% of the outstanding stock
Rs 69,000 crore provided for health care in Union Budget 2020-21
Viability gap funding window proposed for setting up hospitals under Prime Minister Jan Arogya Yojana in PPP Mode
Jan Aushadhi Kendra Scheme to be expanded to all districts by 2024