The key highlights of the Budget documents are as follows:
- Tax Slab
|Income range per annum||Financial Year 2020-2021||Financial Year 2019-2020|
|Taxable Income Slab||Tax Rates||Tax Rates|
|Below 2.5 lakhs||No Tax||No Tax|
|Above 15 lakhs||30%||30%|
|Rebate under section 87(A)||100% tax rebate subject to a maximum of Rs. 2,500 available to resident individuals whose total income does not exceed Rs. 3.5 lakhs||100% tax rebate subject to a maximum of Rs. 2,500 available to resident individuals whose total income does not exceed Rs. 3.5 lakhs|
Also, to simplify the tax system, 70 out of more than 100 tax exemptions and deductions have been removed.
- Companies are not required to pay DDT, now it will be taxed only at the hands of recipients.
- The cash reward system envisaged incentivizing customers to seek invoices.
- 15% concessional tax rate for new power generation companies.
- Tax on cooperative societies reduced to 22% without exemptions.
- 100% tax concession to sovereign wealth funds on investment in infrastructure projects.
- Tax on Cooperative societies to be reduced to 22 per cent plus surcharge and cess as against 30 percent at present.
- Tax holiday for affordable housing extended by 1 year. Additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31st March 2021.
- Govt plans to sell part of its holding in Life Insurance Corporation (LIC) by way of Initial Public Offering.
- FPI limit in corporate bonds raised to 15% from 9%.
- The government doubles the divestment target for the next fiscal at Rs 2.1 lakh crore.
- 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%.
- 5% health cess to be imposed on the imports of medical devices, except those exempts from BCD.
- Lower customs duty on certain inputs and raw materials like fuse, chemicals, and plastics.
- Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.
- Startups & MSME
- The tax burden on employees due to tax on ESOPs to be deferred by five years or till they leave the company or when they sell, whichever is earliest.
- New Simplified return for GST from April 2020
- Start-ups with turnover up to Rs. 100 crores to enjoy a 100% deduction for 3 consecutive assessment years out of 10 years.
- The turnover threshold for the audit of MSMEs to be increased from Rs 1 crore to Rs 5 crore, to those businesses which carry out less than 5% of their business.
- Fiscal numbers & allocations
- FY20 fiscal deficit revised to 3.8% from 3.3% in the current fiscal. For FY21, the fiscal target seen at 3.5%.
- Net market borrowing for FY20 at Rs 4.99 lakh crore; For FY21 it’s pegged at Rs 5.36 lakh crore.
- The nominal GDP growth for 2020-21 estimated at 10%.
- Receipts for 2020-21 estimated at Rs 22.46 lakh crore. Expenditure at Rs 30.42 lakh crore.
- Defense gets Rs 3.37 lakh crore as the defense budget.
- Rs 2.83 lakh crore to be allocated for the 16 Action Points; 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 85,000 crore for SC, OBCs schemes; Rs 28,600 for women specific schemes; Rs 9,500 crore for senior citizen schemes.
- Rs 30,757 crore rupees for Union Territory of J&K; Rs 5,958 crore rupees for Union Territory of Ladakh.
- To help bank depositors, the government increases depositor insurance to Rs 5 lakh from the current Rs 1 lakh.
- Banking Regulation Act to be amended to strengthen Cooperative banks.
- National recruitment agency: New common entrance tests for non-gazetted government jobs and public sector banks.
- Special bridge courses to be designed by the Ministries of Health, and Skill Development: To fulfill the demand for teachers, nurses, para-medical staff and caregivers abroad.
- Urban local bodies to provide internships for young engineers for a period of up to one year.
- 5 new smart cities to be set up via the PPP model.
- Rs 1.7 lakh crore allocated to transportation.
- 100 more airports to be set up by 2024 to support the 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.
- About Rs 22,000 crore already provided for supporting National Infrastructure Pipeline.
- Investment Clearance Cell to set up through a portal will provide end-to-end facilitation, support, and information on land banks
- National Logistics Policy will soon be released, creating a single window e-logistics market
- 5 archaeology sites to be developed for world-class museums
- Rakhigarhi (Haryana)
- 2. Hastinapur (Uttar Pradesh)
- 3. Shivsagar (Assam)
- 4. Dholavira (Gujarat)
- 5. Adichanallur (Tamil Nadu)
- Rs 2,500 crore for tourism promotion
- 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 for renovation and re-curation.
- Rs.3150 crore proposed for the Ministry of Culture for 2020-21.
- Maritime Museum to be set up at Lothal- the Harrapan age maritime site near Ahmedabad, by the Ministry of Shipping.
- 5 archaeology sites to be developed for world-class museums
- Rs 6,000 crore for BharatNet program; Fibre to Home connections under BharatNet will be provided to 1 lakh gram panchayats this year itself
- New policy for the private sector to build Data Centre Parks.
- Expansion of National Gas Grid from 16,200 km to 27,000 km along with reforms to deepen gas markets, enable ease of transactions and transparent price discovery
- Rs 22,000 crore allocated to power and renewable energy.
- Advise to shut thermal plants if they don’t meet emission norms.
- 5 measures for Railways:
- Large solar power capacity to be set up alongside rail tracks, on land owned by Railways
- More Tejas-like trains for tourists.
- 150 new trains to be introduced on a PPP basis; Four stations will also be redevelopment with the help of PPP.
- Rs 18,600 crore worth Bengaluru suburban transport project launched; 20% equity will be provided by the Centre.
- Rs 99,300 crore allocated for the education sector, Rs 3,000 crore rupees for skill development
- External commercial borrowings and FDI to be leveraged to improve the education system.
- A medical college to be attached to a district hospital in PPP mode, viability gap funding to be set up for setting up such medical colleges.
- New Education Policy to be announced soon.
- 150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021.
- To launch 2 new National science schemes
- National Police University and National Forensic Science University proposed for policing science, forensic science, and cyber-forensics.
- Agriculture market needs to be liberalized; govt proposes to handhold farmers
- Comprehensive measures for 100 water-stressed districts being proposed
- PM KUSUM scheme will be expanded to 20 lakh farmers.
- Another 15 lakh farmers to be helped to solarise their grid-connected pump sets.
- Scheme to enable farmers to set up solar power generation capacity on their fallow/barren lands and to sell it to the grid.
- Change in incentive scheme for chemical fertilizers.
- Krishi UDAN scheme for agricultural exports on international and national routes.
- Railways will set up Kisan Rail through PPP arrangement, for transportation of perishable goods.
- For better marketing and export, supporting states will focus on one product for one district, so that high focus is given at district level for horticulture to gain momentum
- Zero Budget farming focus of the government.
- MGNREGS to be used to develop a fodder farm.
- Jaivik Kheti Portal – online national organic products market to be strengthened.
- Rs 69,000 crore allocated to the healthcare sector.
- Rs. 6400 crore (out of Rs. 69,000 crores) for PM Jan Arogya Yojana (PMJAY
- A new scheme to provide higher insurance cover, the reduced premium for small exporters and simplified procedure for claims